Analyzing Microsoft (MSFT) & Citrix Systems (CTXS)

Microsoft (NASDAQ: MSFT) and Citrix Systems (NASDAQ:CTXS) are both large-cap technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.

Risk & Volatility

Microsoft has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Citrix Systems has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500.

Valuation and Earnings

This table compares Microsoft and Citrix Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Microsoft $89.95 billion 7.94 $21.20 billion $3.26 28.44
Citrix Systems $2.82 billion 4.42 -$20.71 million ($0.24) -382.42

Microsoft has higher revenue and earnings than Citrix Systems. Citrix Systems is trading at a lower price-to-earnings ratio than Microsoft, indicating that it is currently the more affordable of the two stocks.

Dividends

Microsoft pays an annual dividend of $1.68 per share and has a dividend yield of 1.8%. Citrix Systems does not pay a dividend. Microsoft pays out 51.5% of its earnings in the form of a dividend. Microsoft has increased its dividend for 14 consecutive years.

Profitability

This table compares Microsoft and Citrix Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Microsoft 11.72% 35.41% 11.31%
Citrix Systems -0.73% 38.56% 11.52%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Microsoft and Citrix Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Microsoft 1 6 27 0 2.76
Citrix Systems 2 8 8 0 2.33

Microsoft presently has a consensus target price of $98.68, indicating a potential upside of 5.87%. Citrix Systems has a consensus target price of $91.31, indicating a potential downside of 0.51%. Given Microsoft’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Microsoft is more favorable than Citrix Systems.

Insider and Institutional Ownership

73.2% of Microsoft shares are owned by institutional investors. Comparatively, 92.0% of Citrix Systems shares are owned by institutional investors. 1.5% of Microsoft shares are owned by insiders. Comparatively, 0.4% of Citrix Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Microsoft beats Citrix Systems on 12 of the 17 factors compared between the two stocks.

Microsoft Company Profile

Microsoft Corporation is a technology company. The Company develops, licenses, and supports a range of software products, services and devices. The Company’s segments include Productivity and Business Processes, Intelligent Cloud and More Personal Computing. The Company’s products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; video games, and training and certification of computer system integrators and developers. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, phones, other intelligent devices, and related accessories, that integrate with its cloud-based offerings. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services.

Citrix Systems Company Profile

Citrix Systems, Inc. offers Enterprise and Service Provider products, which include Workspace Services solutions and Delivery Networking products. The Company’s Enterprise and Service Provider products include Cloud Services solutions, and related license updates and maintenance, support and professional services. The Company’s NetScaler nCore Technology is an architecture that enables execution of multiple packet engines in parallel. The Company’s workspace services include Application Virtualization and virtual desktop infrastructure (VDI), Enterprise Mobility Management and Citrix Workspace Suite. The Company’s NetScaler ADC is a software-defined application delivery controller (ADC) and load balancer. The Company’s Cloud Services include ShareFile and Citrix Cloud. It provides various ways for customers to receive upgrades, support and maintenance for products, which include Software Maintenance, Subscription Advantage, Technical Support Services and Hardware Maintenance.

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