Microsoft Corporation (MSFT) vs News Corporation (NWSA): Which Is the Better Buy in 2026?
As of 2026-06-19, MSFT is fairly valued at $379, with a DCF intrinsic value of $440 and a margin of safety of 14%. NWSA is undervalued at $25, with an intrinsic value of $94 and a margin of safety of 73%. Of the two, NWSA has the wider margin of safety.
Rewards
- ★Microsoft Corporation has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Gross margin of 68.3% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★Microsoft Corporation scores 88/100 on the Economic Moat Score (Wide Moat), with revenue predictability as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $4.39 of earning power — management is an exceptional capital allocator.
- ★FCF yield of 12.7% is historically attractive — the business generates significant cash relative to its price.
- ★Trailing P/E of 32.0x is 30% below the historical average of 45.7x — potentially undervalued relative to its own history.
Risks
- ⚠FCF yield of 2.5% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠Insiders have sold $10.5M worth of stock in the past 3 months — significant insider liquidation.
- ⚠PEG ratio of 3.07 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠Free cash flow has declined at a 12.6% CAGR over the past 4 years — a concerning trend.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $379?
The market implies +12.4% Owner Earnings growth, roughly in line with history — reasonably priced.
Standard FCF implies +17.1%, reflecting ongoing growth investment.
What growth rate is the market pricing in at $25?
The market implies +0.5% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding -4.5%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Wide moat driven primarily by revenue predictability. Reinvestment Efficiency is the area most vulnerable to competitive pressure.
No durable moat detected, though reinvestment efficiency shows some competitive positioning. The business lacks consistent evidence of sustainable advantages.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pessimistic — investigate whether fears are temporary or structural"
"Market is pessimistic — investigate whether fears are temporary or structural"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: MSFT vs NWSA
Is Microsoft Corporation or News Corporation more undervalued in 2026?▼
Based on our discounted cash flow model, NWSA trades at a 73.1% margin of safety (intrinsic value $94 vs. price $25), compared to MSFT's 13.7% margin of safety (intrinsic $440 vs. $379).
Which stock has a wider economic moat, Microsoft Corporation or News Corporation?▼
MSFT scores 88/100 (Wide moat), while NWSA scores 39/100 (None moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is News Corporation in financial distress?▼
NWSA's Altman Z-Score of 2.3 places it in the Grey zone, signaling elevated bankruptcy risk. MSFT scores 9.6 (Safe zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which company has better free cash flow, Microsoft Corporation or News Corporation?▼
News Corporation (NWSA) generates a 12.7% free cash flow yield, compared to Microsoft Corporation's 2.5%. A higher FCF yield means the business converts more of its market value into cash that can be returned to shareholders or reinvested.
Which stock has higher return on invested capital, Microsoft Corporation or News Corporation?▼
MSFT earns 21.6% ROIC versus NWSA's 5.8%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Microsoft Corporation's or News Corporation's?▼
MSFT's dividend earns a safety score of 94/100 (Very Safe), compared to NWSA's 88/100 (Very Safe). MSFT has raised its dividend for 3 consecutive years.