DDM Analysis: MSFT

Valuation Snapshot

Stable Growth	$288.40 - $661.40	$420.71
Multi-Stage	$206.39 - $225.41	$215.72
Blended Fair Value	$318.22
Current Price	$517.95
Upside	-38.56%
Decision	Don't Buy

Dividend History & Growth Metrics (10Y)

Metric	5Y CAGR	10Y CAGR	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016
DPS	9.73%	9.32%	3.23	2.92	2.65	2.43	2.21	2.03	1.85	1.70	1.59	1.47
YoY Growth	-	-	10.62%	9.95%	9.18%	9.77%	9.14%	9.60%	8.76%	7.21%	7.62%	11.37%
Dividend Yield	-	-	0.62%	0.68%	0.84%	1.04%	0.79%	0.96%	1.33%	1.47%	2.13%	2.56%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)

Net Income To Common (M)	104,912.00
(-) Cash Dividends Paid (M)	24,677.00
(=) Cash Retained (M)	80,235.00

Metric	LOW	BASE	HIGH
Required Retention Ratio	20.0%	12.5%	7.5%
(=) Cash Required (M)	20,982.40	13,114.00	7,868.40
Cash Retained (M)	80,235.00	80,235.00	80,235.00
(-) Cash Required (M)	-20,982.40	-13,114.00	-7,868.40
(=) Excess Retained (M)	59,252.60	67,121.00	72,366.60
(/) Shares Outstanding (M)	7,465.00	7,465.00	7,465.00
(=) Excess Retained per Share	7.94	8.99	9.69
LTM Dividend per Share	3.31	3.31	3.31
(+) Excess Retained per Share	7.94	8.99	9.69
(=) Adjusted Dividend	11.24	12.30	13.00
WACC / Discount Rate	9.61%	9.61%	9.61%
Growth Rate	5.50%	6.50%	7.50%
Fair Value	$288.40	$420.71	$661.40
Upside / Downside	-44.32%	-18.77%	27.70%

Multi-Stage Model: Projections

(USD in Millions)

Metric	TTM	Dec-27	Dec-28	Dec-29	Dec-30	Dec-31	Terminal
Net Income (M)	104,912.00	111,731.28	118,993.81	126,728.41	134,965.76	143,738.53	148,050.69
Payout Ratio	23.52%	36.82%	50.11%	63.41%	76.70%	90.00%	92.50%
Projected Dividends (M)	24,677.00	41,136.43	59,631.33	80,356.77	103,524.57	129,364.68	136,946.89

Multi-Stage Valuation

Metric	LOW	BASE	HIGH
WACC / Discount Rate	9.61%	9.61%	9.61%
Growth Rate	5.50%	6.50%	7.50%
Year 1 PV (M)	37,176.44	37,528.83	37,881.21
Year 2 PV (M)	48,703.13	49,630.79	50,567.20
Year 3 PV (M)	59,312.47	61,015.12	62,750.04
Year 4 PV (M)	69,057.07	71,712.81	74,444.42
Year 5 PV (M)	77,986.89	81,753.69	85,664.65
PV of Terminal Value (M)	1,248,435.11	1,308,734.99	1,371,342.69
Equity Value (M)	1,540,671.11	1,610,376.22	1,682,650.21
Shares Outstanding (M)	7,465.00	7,465.00	7,465.00
Fair Value	$206.39	$215.72	$225.41
Upside / Downside	-60.15%	-58.35%	-56.48%

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Ticker ⇵	Company ⇵	Dividend Yield % ▼	Dividend Per Share ⇵	Payout Ratio % ⇵
BTBT	Bit Digital, Inc.	0.25%	$0.01	1.17%
PVH	PVH Corp.	0.25%	$0.17	2.41%
AEL	American Equity Investment Life Holding Company	0.24%	$0.14	2.19%
CRS	Carpenter Technology Corporation	0.24%	$0.80	9.74%
L	Loews Corporation	0.24%	$0.25	3.58%
PRIM	Primoris Services Corporation	0.23%	$0.30	5.83%
TER	Teradyne, Inc.	0.23%	$0.48	17.39%
FOCS	Focus Financial Partners Inc.	0.22%	$0.12	19.23%
QCRH	QCR Holdings, Inc.	0.22%	$0.18	2.50%
RMAX	RE/MAX Holdings, Inc.	0.22%	$0.02	2.70%
VSEC	VSE Corporation	0.22%	$0.40	30.98%
0J5I.L	Hilton Worldwide Holdings Inc.	0.21%	$0.60	8.71%
PRVAX	Virginia Tax Free Bond Fund	0.21%	$0.02	89.04%
ACA	Arcosa, Inc.	0.19%	$0.20	6.66%
HWM	Howmet Aerospace Inc.	0.19%	$0.40	11.24%
USLM	United States Lime & Minerals, Inc.	0.19%	$0.23	5.04%
AEIS	Advanced Energy Industries, Inc.	0.18%	$0.40	10.65%
BELFA	Bel Fuse Inc.	0.18%	$0.28	5.31%
TILE	Interface, Inc.	0.18%	$0.05	2.63%
0K05.L	Medifast, Inc.	0.17%	$0.02	78.63%
AYI	Acuity Brands, Inc.	0.17%	$0.65	5.19%
BDC	Belden Inc.	0.17%	$0.20	3.53%
FIX	Comfort Systems USA, Inc.	0.17%	$1.70	7.18%
KNSL	Kinsale Capital Group, Inc.	0.17%	$0.66	3.24%
STCN	Steel Connect, Inc.	0.17%	$0.02	1.98%
VVI	Viad Corp	0.17%	$0.07	0.54%
ALNT	Allient Inc.	0.16%	$0.09	7.91%
CLSK	CleanSpark, Inc.	0.16%	$0.02	1.41%
EME	EMCOR Group, Inc.	0.16%	$1.01	4.01%
ESE	ESCO Technologies Inc.	0.16%	$0.32	2.76%
CW	Curtiss-Wright Corporation	0.15%	$0.87	7.08%
MU	Micron Technology, Inc.	0.15%	$0.46	6.11%
SPCMU	Sound Point Acquisition Corp I, Ltd	0.15%	$0.02	1.33%
ENSG	The Ensign Group, Inc.	0.14%	$0.24	4.34%
JBL	Jabil Inc.	0.14%	$0.33	5.48%
PFIE	Profire Energy, Inc.	0.14%	$0.00	1.99%
0R0A.L	Hecla Mining Company	0.13%	$0.02	5.24%
GNW	Genworth Financial, Inc.	0.13%	$0.01	2.27%
ONIT	Onity Group Inc.	0.13%	$0.06	1.46%
0A7O.L	MicroStrategy Incorporated	0.12%	$0.19	0.73%
0KGS.L	Pegasystems Inc.	0.12%	$0.07	4.63%
PRTAX	T. Rowe Price Tax-Free Income Fd	0.12%	$0.01	89.04%
WDC	Western Digital Corporation	0.12%	$0.22	3.25%
GEV	GE Vernova Inc.	0.11%	$0.75	12.15%
MPLF.L	Marble Point Loan Financing Limited	0.11%	$0.07	92.98%
EPAC	Enerpac Tool Group Corp.	0.10%	$0.04	2.34%
GRBK	Green Brick Partners, Inc.	0.10%	$0.07	0.85%
IR	Ingersoll Rand Inc.	0.10%	$0.08	5.89%
RAL	Ralliant Corp.	0.10%	$0.05	2.75%
TXT	Textron Inc.	0.10%	$0.08	1.79%

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Microsoft Corporation (MSFT)

Valuation Snapshot

Dividend History & Growth Metrics (10Y)

Stable Growth Model (Adjusted)

Multi-Stage Model: Projections

Multi-Stage Valuation

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