MGIC
Magic Software Enterprises Ltd.
Information Technology Services
Market Cap$853M
5Y Perf.+70.9%
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Stock Comparison
MGIC vs MSFT
Revenue, margins, valuation, and 5-year total return — side by side.
MSFT
Microsoft Corporation
Software - Infrastructure
Market Cap$3.08T
5Y Perf.+114.3%
MGIC vs MSFT — Key Financials
Market cap, revenue, margins, and valuation side-by-side.
| Company Snapshot | MGIC | MSFT |
|---|---|---|
| Industry | Information Technology Services | Software - Infrastructure |
| Market Cap | $853M | $3.08T |
| Revenue (TTM) | $603M | $318.27B |
| Net Income (TTM) | $40M | $125.22B |
| Gross Margin | 28.0% | 68.3% |
| Operating Margin | 10.8% | 46.8% |
| Forward P/E | 15.0x | 24.8x |
| Total Debt | $86M | $112.18B |
| Cash & Equiv. | $113M | $30.24B |
MGIC vs MSFT — Long-Term Stock Performance
Price return indexed to 100 at period start. Dividends excluded.
MGIC
MSFT
| Stock | May 20 | Mar 26 | Return |
|---|---|---|---|
| Magic Software Ente… (MGIC) | 100 | 170.9 | +70.9% |
| Microsoft Corporati… (MSFT) | 100 | 214.3 | +114.3% |
Price return only. Dividends and distributions are not included.
Quick Verdict: MGIC vs MSFT
Each card shows where this stock fits in a portfolio — not just who wins on paper.
Bottom line: MSFT leads in 4 of 7 categories, making it the strongest pick for growth and revenue expansion and profitability and margin quality. Magic Software Enterprises Ltd. is the stronger pick specifically for valuation and capital efficiency and dividend income and shareholder returns. As sector peers, any of these can serve as alternatives in the same allocation.
MGIC
Magic Software Enterprises Ltd.
The Defensive Pick
MGIC is the clearest fit if your priority is sleep-well-at-night and valuation efficiency.
- Lower volatility, beta 1.44, Low D/E 28.6%, current ratio 1.62x
- PEG 0.63 vs MSFT's 1.32
- Beta 1.44, yield 1.2%, current ratio 1.62x
Best for: sleep-well-at-night and valuation efficiency
MSFT
Microsoft Corporation
The Income Pick
MSFT carries the broadest edge in this set and is the clearest fit for income & stability and growth exposure.
- Dividend streak 19 yrs, beta 0.85, yield 0.8%
- Rev growth 14.9%, EPS growth 15.6%, 3Y rev CAGR 12.4%
- 7.8% 10Y total return vs MGIC's 222.0%
Best for: income & stability and growth exposure
See the full category breakdown
| Category | Winner | Why |
|---|---|---|
| Growth | MSFT | 14.9% revenue growth vs MGIC's 3.3% |
| Value | MGIC | Lower P/E (15.0x vs 24.8x), PEG 0.63 vs 1.32 |
| Quality / Margins | MSFT | 39.3% margin vs MGIC's 6.6% |
| Stability / Safety | MSFT | Beta 0.85 vs MGIC's 1.44 |
| Dividends | MGIC | 1.2% yield, vs MSFT's 0.8% |
| Momentum (1Y) | MGIC | +23.7% vs MSFT's -4.5% |
| Efficiency (ROA) | MSFT | 19.2% ROA vs MGIC's 7.4%, ROIC 24.9% vs 16.2% |
MGIC vs MSFT — Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
FY 2021
FY 2025
MGIC vs MSFT — Financial Metrics
Side-by-side numbers across 2 stocks — who leads on profitability, valuation, growth, and risk.
BEST OVERALLMSFTLAGGINGMGIC
MGICMagic Software Enterp…
1leads
MSFTMicrosoft Corporation
4leads
6 Total Categories
CATEGORYLEADERvs MGICMETRICS WON
Income & Cash FlowRevenue, margins, and cash flow strength
MSFT6/6
Valuation MetricsMultiples, price ratios, and targets
MGIC7/7
Profitability & EfficiencyROE, ROIC, leverage, and quality scores
MSFT6/9
Total Returns1Y, 3Y, 5Y total returns with dividends
MSFT5/6
Risk & VolatilityBeta, volatility, and downside exposure
MSFT2/2
Analyst OutlookRatings, price targets, and dividends
Tied
—
Income & Cash Flow (Last 12 Months)
MSFT leads this category, winning 6 of 6 comparable metrics.
Income & Cash Flow (Last 12 Months)
MSFT is the larger business by revenue, generating $318.3B annually — 527.6x MGIC's $603M. MSFT is the more profitable business, keeping 39.3% of every revenue dollar as net income compared to MGIC's 6.6%. On growth, MSFT holds the edge at +18.3% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| RevenueTrailing 12 months | $603M | $318.3B |
| EBITDAEarnings before interest/tax | $87M | $192.6B |
| Net IncomeAfter-tax profit | $40M | $125.2B |
| Free Cash FlowCash after capex | $64M | $72.9B |
| Gross MarginGross profit ÷ Revenue | +28.0% | +68.3% |
| Operating MarginEBIT ÷ Revenue | +10.8% | +46.8% |
| Net MarginNet income ÷ Revenue | +6.6% | +39.3% |
| FCF MarginFCF ÷ Revenue | +10.7% | +22.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | +13.1% | +18.3% |
| EPS Growth (YoY)Latest quarter vs prior year | +17.6% | +23.4% |
MSFT leads this category, winning 6 of 6 comparable metrics.
Valuation Metrics
MGIC leads this category, winning 7 of 7 comparable metrics.
Valuation Metrics
At 23.2x trailing earnings, MGIC trades at a 24% valuation discount to MSFT's 30.4x P/E. Adjusting for growth (PEG ratio), MGIC offers better value at 0.98x vs MSFT's 1.62x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| Market CapShares × price | $853M | $3.08T |
| Enterprise ValueMkt cap + debt − cash | $827M | $3.17T |
| Trailing P/EPrice ÷ TTM EPS | 23.17x | 30.43x |
| Forward P/EPrice ÷ next-FY EPS est. | 14.98x | 24.77x |
| PEG RatioP/E ÷ EPS growth rate | 0.98x | 1.62x |
| EV / EBITDAEnterprise value multiple | 10.07x | 19.46x |
| Price / SalesMarket cap ÷ Revenue | 1.54x | 10.94x |
| Price / BookPrice ÷ Book value/share | 2.83x | 9.02x |
| Price / FCFMarket cap ÷ FCF | 11.64x | 43.06x |
MGIC leads this category, winning 7 of 7 comparable metrics.
Profitability & Efficiency
MSFT leads this category, winning 6 of 9 comparable metrics.
Profitability & Efficiency
MSFT delivers a 33.1% return on equity — every $100 of shareholder capital generates $33 in annual profit, vs $13 for MGIC. MGIC carries lower financial leverage with a 0.29x debt-to-equity ratio, signaling a more conservative balance sheet compared to MSFT's 0.33x. On the Piotroski fundamental quality scale (0–9), MSFT scores 6/9 vs MGIC's 4/9, reflecting solid financial health.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| ROE (TTM)Return on equity | +13.4% | +33.1% |
| ROA (TTM)Return on assets | +7.4% | +19.2% |
| ROICReturn on invested capital | +16.2% | +24.9% |
| ROCEReturn on capital employed | +16.3% | +29.7% |
| Piotroski ScoreFundamental quality 0–9 | 4 | 6 |
| Debt / EquityFinancial leverage | 0.29x | 0.33x |
| Net DebtTotal debt minus cash | -$27M | $81.9B |
| Cash & Equiv.Liquid assets | $113M | $30.2B |
| Total DebtShort + long-term debt | $86M | $112.2B |
| Interest CoverageEBIT ÷ Interest expense | 11.90x | 55.65x |
MSFT leads this category, winning 6 of 9 comparable metrics.
Total Returns (Dividends Reinvested)
MSFT leads this category, winning 5 of 6 comparable metrics.
Total Returns (Dividends Reinvested)
A $10,000 investment in MSFT five years ago would be worth $17,377 today (with dividends reinvested), compared to $12,306 for MGIC. Over the past 12 months, MGIC leads with a +23.7% total return vs MSFT's -4.5%. The 3-year compound annual growth rate (CAGR) favors MSFT at 11.2% vs MGIC's 10.9% — a key indicator of consistent wealth creation.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| YTD ReturnYear-to-date | -33.3% | -12.0% |
| 1-Year ReturnPast 12 months | +23.7% | -4.5% |
| 3-Year ReturnCumulative with dividends | +36.5% | +37.6% |
| 5-Year ReturnCumulative with dividends | +23.1% | +73.8% |
| 10-Year ReturnCumulative with dividends | +222.0% | +776.0% |
| CAGR (3Y)Annualised 3-year return | +10.9% | +11.2% |
MSFT leads this category, winning 5 of 6 comparable metrics.
Risk & Volatility
MSFT leads this category, winning 2 of 2 comparable metrics.
Risk & Volatility
MSFT is the less volatile stock with a 0.85 beta — it tends to amplify market swings less than MGIC's 1.44 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. MSFT currently trades 74.7% from its 52-week high vs MGIC's 62.1% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 1.44x | 0.85x |
| 52-Week HighHighest price in past year | $28.00 | $555.45 |
| 52-Week LowLowest price in past year | $14.31 | $356.28 |
| % of 52W HighCurrent price vs 52-week peak | +62.1% | +74.7% |
| RSI (14)Momentum oscillator 0–100 | 30.7 | 57.9 |
| Avg Volume (50D)Average daily shares traded | 46K | 32.5M |
MSFT leads this category, winning 2 of 2 comparable metrics.
Analyst Outlook
Evenly matched — MGIC and MSFT each lead in 1 of 2 comparable metrics.
Analyst Outlook
Wall Street rates MGIC as "Buy" and MSFT as "Buy". Consensus price targets imply 34.2% upside for MSFT (target: $557) vs 6.4% for MGIC (target: $19). For income investors, MGIC offers the higher dividend yield at 1.17% vs MSFT's 0.78%.
| Metric | MGICMagic Software En… | MSFTMicrosoft Corpora… |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $18.50 | $556.88 |
| # AnalystsCovering analysts | 6 | 81 |
| Dividend YieldAnnual dividend ÷ price | +1.2% | +0.8% |
| Dividend StreakConsecutive years of raises | 0 | 19 |
| Dividend / ShareAnnual DPS | $0.20 | $3.23 |
| Buyback YieldShare repurchases ÷ mkt cap | 0.0% | +0.6% |
Evenly matched — MGIC and MSFT each lead in 1 of 2 comparable metrics.
Key Takeaway
MSFT leads in 4 of 6 categories (Income & Cash Flow, Profitability & Efficiency). MGIC leads in 1 (Valuation Metrics). 1 tied.
Best OverallMicrosoft Corporation (MSFT)Leads 4 of 6 categories
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MGIC vs MSFT: Frequently Asked Questions
10 questions · data-driven answers · updated daily
01Is MGIC or MSFT a better buy right now?
For growth investors, Microsoft Corporation (MSFT) is the stronger pick with 14.
9% revenue growth year-over-year, versus 3. 3% for Magic Software Enterprises Ltd. (MGIC). Magic Software Enterprises Ltd. (MGIC) offers the better valuation at 23. 2x trailing P/E (15. 0x forward), making it the more compelling value choice. Analysts rate Magic Software Enterprises Ltd. (MGIC) a "Buy" — based on 6 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — MGIC or MSFT?
On trailing P/E, Magic Software Enterprises Ltd.
(MGIC) is the cheapest at 23. 2x versus Microsoft Corporation at 30. 4x. On forward P/E, Magic Software Enterprises Ltd. is actually cheaper at 15. 0x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Magic Software Enterprises Ltd. wins at 0. 63x versus Microsoft Corporation's 1. 32x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — MGIC or MSFT?
Over the past 5 years, Microsoft Corporation (MSFT) delivered a total return of +73.
8%, compared to +23. 1% for Magic Software Enterprises Ltd. (MGIC). Over 10 years, the gap is even starker: MSFT returned +776. 0% versus MGIC's +222. 0%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — MGIC or MSFT?
By beta (market sensitivity over 5 years), Microsoft Corporation (MSFT) is the lower-risk stock at 0.
85β versus Magic Software Enterprises Ltd. 's 1. 44β — meaning MGIC is approximately 69% more volatile than MSFT relative to the S&P 500. On balance sheet safety, Magic Software Enterprises Ltd. (MGIC) carries a lower debt/equity ratio of 29% versus 33% for Microsoft Corporation — giving it more financial flexibility in a downturn.
05Which is growing faster — MGIC or MSFT?
By revenue growth (latest reported year), Microsoft Corporation (MSFT) is pulling ahead at 14.
9% versus 3. 3% for Magic Software Enterprises Ltd. (MGIC). On earnings-per-share growth, the picture is similar: Microsoft Corporation grew EPS 15. 6% year-over-year, compared to 0. 0% for Magic Software Enterprises Ltd.. Over a 3-year CAGR, MSFT leads at 12. 4% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.
06Which has better profit margins — MGIC or MSFT?
Microsoft Corporation (MSFT) is the more profitable company, earning 36.
1% net margin versus 6. 7% for Magic Software Enterprises Ltd. — meaning it keeps 36. 1% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: MSFT leads at 45. 6% versus 11. 1% for MGIC. At the gross margin level — before operating expenses — MSFT leads at 68. 8%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
07Is MGIC or MSFT more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.
By this metric, Magic Software Enterprises Ltd. (MGIC) is the more undervalued stock at a PEG of 0. 63x versus Microsoft Corporation's 1. 32x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Magic Software Enterprises Ltd. (MGIC) trades at 15. 0x forward P/E versus 24. 8x for Microsoft Corporation — 9. 8x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for MSFT: 34. 2% to $556. 88.
08Which pays a better dividend — MGIC or MSFT?
All stocks in this comparison pay dividends.
Magic Software Enterprises Ltd. (MGIC) offers the highest yield at 1. 2%, versus 0. 8% for Microsoft Corporation (MSFT).
09Is MGIC or MSFT better for a retirement portfolio?
For long-horizon retirement investors, Microsoft Corporation (MSFT) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.
85), 0. 8% yield, +776. 0% 10Y return). Both have compounded well over 10 years (MSFT: +776. 0%, MGIC: +222. 0%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
10What are the main differences between MGIC and MSFT?
Both stocks operate in the Technology sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.
These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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Revenue Growth>
%
(MGIC: 13.1% · MSFT: 18.3%)Net Margin>
%
(MGIC: 6.6% · MSFT: 39.3%)P/E Ratio<
x
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