For the past 24 years, the Seattle Times has been ranking publicly traded companies in a “Best of the Northwest” feature, with the latest version coming out today and placing Microsoft at the top of the list. The Times bases the rankings on a number of financial criteria, as explained in their latest Best of list:
We picked five measures of corporate performance — return on invested capital, free cash-flow yield, stock-price appreciation, revenue growth and dividend yield — then combined them into a single ranking using our proprietary formula.
(You can read more about their methodology on SeattleTimes.com)
As noted by Times’ technology writer Matt Day, this is the first time that Microsoft has topped the list since 1992, a measure of the company’s resurgence in the wake of the appointment of CEO Satya Nadella to replace Steve Ballmer, and a renewed emphasis on what Nadella terms a “mobile first, cloud first world”.
The Times lists Microsoft with a Return on Investment Capital of 20.6%, a market cap of $381.7 billion, a year over year Price to Earnings ratio of 17.6, and with 128,000 employees. The company’s market cap, having been eclipsed by its southern neighbors Apple and Google, still stands far above Amazon.com’s $144 billion, Nike’s $83 billion, and Starbucks’ $61 billion market caps, although the Times’ chart lists Amazon as having slightly higher sales, at $89 billion in FY 2014 to Microsoft’s $86.8 billion.
Microsoft still has a long way to go to recapture leadership in the software and services space as it was eclipsed by a transition to mobile it apparently didn’t see coming, or was unable to react quickly enough to. The company is planning the release of Windows 10 in just under two months from now, with high hopes that the new OS will rekindle interest in the company with consumers. Even if they don’t, it’s important to remember that Microsoft, with its emphasis on the enterprise, on Azure, and on Office 365, is still in a dominant position, and still making lots of money for itself and for the region.
