As far as technology investments go, Microsoft Corp. (NASDAQ:MSFT) is one of the best options for investors today, in my view. This company has some of the best characteristics among its large-cap, blue-chip tech stock peers. Microsoft’s valuation reflects this reality.
Microsoft is a stock that has never been cheap and is trading near an all-time high. It’s also a stock that still holds one of the best valuations on the basis of growth, in comparison to its peers, looking at the company’s price earnings to growth (PEG) ratio. Microsoft’s return on equity (ROE) is absolutely insane at above 40%, driven by a core business that has been further enhanced by the coronavirus pandemic.
Cloud computing, and software in general, are sectors investors are going to not only for growth long-term but also safety. Economic uncertainty remains elevated. Technology stocks remain the safe place to go. Letting the winners like Microsoft that have seen impressive capital appreciation in recent years run is a great strategy and has outperformed value investing in recent years. Sticking with momentum and growth investing strategies, particularly in the large cap blue chip tech sector is a strategy many believe will continue to outperform for some time.
Letting Microsoft’s growth continue to compound over the long term, using a buy-and-hold strategy with this stock is the best way to play the company, for conservative investors.
Invest wisely, my friends.
