Microsoft (MSFT) & Medidata Solutions (MDSO) Financial Comparison

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Medidata Solutions (NASDAQ:MDSO) and Microsoft (NASDAQ:MSFT) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Medidata Solutions and Microsoft, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Medidata Solutions 0 4 6 0 2.60
Microsoft 1 1 31 1 2.94

Medidata Solutions presently has a consensus target price of $85.70, suggesting a potential upside of 15.89%. Microsoft has a consensus target price of $122.45, suggesting a potential upside of 9.84%. Given Medidata Solutions’ higher possible upside, equities research analysts clearly believe Medidata Solutions is more favorable than Microsoft.

Earnings & Valuation

This table compares Medidata Solutions and Microsoft’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Medidata Solutions $545.53 million 8.29 $44.38 million $0.85 87.00
Microsoft $110.36 billion 7.78 $16.57 billion $3.88 28.73

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

Profitability

This table compares Medidata Solutions and Microsoft’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Medidata Solutions 8.43% 10.70% 5.69%
Microsoft 16.38% 39.86% 12.78%

Volatility & Risk

Medidata Solutions has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500. Comparatively, Microsoft has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Insider and Institutional Ownership

71.9% of Microsoft shares are owned by institutional investors. 4.7% of Medidata Solutions shares are owned by company insiders. Comparatively, 1.4% of Microsoft shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Dividends

Microsoft pays an annual dividend of $1.68 per share and has a dividend yield of 1.5%. Medidata Solutions does not pay a dividend. Microsoft pays out 43.3% of its earnings in the form of a dividend. Microsoft has increased its dividend for 14 consecutive years.

Summary

Microsoft beats Medidata Solutions on 12 of the 18 factors compared between the two stocks.

About Medidata Solutions

Medidata Solutions, Inc. provides cloud-based solutions for life sciences worldwide. It offers the Medidata Clinical Cloud, a platform, pioneering analytics, and clinical technology for the development of new therapies. The company's platform solutions include data capture and management and trial planning and management. It also provides professional services, such as implementation, sponsor enablement, strategic consulting, partner and ongoing support, and e-learning and training. The company markets and sells its cloud-based solutions through a direct sales force, as well as through relationships with contract research organizations (CROs) and other strategic partners. It serves pharmaceutical, biotechnology, medical device, and diagnostics companies; academic research centers, government, and other non-profit organizations; and CROs and other entities engaged in clinical trials. Medidata Solutions, Inc. was founded in 1999 and is headquartered in New York, New York.

About Microsoft

Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services for businesses, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. The company's Intelligent Cloud segment licenses server products and cloud services, such as SQL Server, Windows Server, Visual Studio, System Center, and related CALs, as well as Azure, a cloud platform; enterprise services, including premier support and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions, as well as providing training and certification to developers and IT professionals on Microsoft products. Its More Personal Computing segment offers Windows OEM, volume, and other non-volume licensing of the Windows operating system; patent licensing, Windows Internet of Things, and MSN display advertising; devices comprising Surface, PC accessories, and other intelligent devices; Xbox hardware and software and services; and Bing and Bing Ads search advertising. The company markets and distributes its products through original equipment manufacturers, distributors, and resellers, as well as through online and Microsoft retail stores. Microsoft Corporation has collaboration with E.ON to develop smart connected home solutions. The company was founded in 1975 and is headquartered in Redmond, Washington.

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