HubSpot (NYSE:HUBS) and Microsoft (NASDAQ:MSFT) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
95.7% of HubSpot shares are owned by institutional investors. Comparatively, 72.0% of Microsoft shares are owned by institutional investors. 9.6% of HubSpot shares are owned by company insiders. Comparatively, 1.4% of Microsoft shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Dividends
Microsoft pays an annual dividend of $1.84 per share and has a dividend yield of 1.6%. HubSpot does not pay a dividend. Microsoft pays out 47.4% of its earnings in the form of a dividend. Microsoft has raised its dividend for 15 consecutive years.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for HubSpot and Microsoft, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| HubSpot | 0 | 7 | 11 | 0 | 2.61 |
| Microsoft | 1 | 1 | 27 | 1 | 2.93 |
HubSpot presently has a consensus target price of $175.07, suggesting a potential upside of 5.70%. Microsoft has a consensus target price of $123.07, suggesting a potential upside of 5.14%. Given HubSpot’s higher possible upside, equities analysts clearly believe HubSpot is more favorable than Microsoft.
Valuation & Earnings
This table compares HubSpot and Microsoft’s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| HubSpot | $512.98 million | 12.79 | -$63.82 million | ($1.02) | -162.38 |
| Microsoft | $110.36 billion | 8.17 | $16.57 billion | $3.88 | 30.17 |
Microsoft has higher revenue and earnings than HubSpot. HubSpot is trading at a lower price-to-earnings ratio than Microsoft, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares HubSpot and Microsoft’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| HubSpot | -12.44% | -17.08% | -5.04% |
| Microsoft | 28.31% | 39.52% | 13.16% |
Volatility and Risk
HubSpot has a beta of 1.91, suggesting that its stock price is 91% more volatile than the S&P 500. Comparatively, Microsoft has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.
Summary
Microsoft beats HubSpot on 12 of the 18 factors compared between the two stocks.
HubSpot Company Profile
HubSpot, Inc. provides a cloud-based marketing and sales software platform for businesses in the Americas, Europe, and the Asia Pacific. The company’s software platform includes integrated applications, such as customer relationship management, search engine optimization, blogging, Website content management, messaging, chatbots, social media, marketing automation, email, predictive lead scoring, sales productivity, ticketing and helpdesk tools, customer NPS surveys, analytics, and reporting. It also offers professional, as well as phone and/or email and chat based support services. It serves mid-market business-to-business companies. The company markets its products through inbound go-to-market approach, marketing agency, and sales partners. HubSpot, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.
Microsoft Company Profile
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, 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; and 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 provides training and certification to developers and IT professionals. 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 its products through original equipment manufacturers, distributors, and resellers; and online and Microsoft retail stores. Microsoft Corporation has collaboration with E.ON; strategic alliance with Nielsen Holdings plc and PAREXEL International Corp.; collaboration with NIIT Technologies Ltd.; and a strategic collaboration with Mastercard Incorporated. The company was founded in 1975 and is headquartered in Redmond, Washington.
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