This is a comparison of Walmart and Microsoft to see which one is a better bet for the nex five years. If we are expecting 10% return per year for the next five years for 50% total return, the stock price apprecition would be as follows:
31 * 1.5 == 46.5
47 * 1.5 == 71
Let us look at the top line growth - Walmart is growing at a rate of 8% at the top line where as Microsoft is growing the topline at 7% per year.
Looking at the bottom line, both Walmart and Microsoft have grown at around 9% per year.
However, Walmart's free cash flow has increased year over year and by about 25% in the past five years. Microsoft's cash flow has declined or remained the same in the past five years. This year, Walmart has taken a special one time charge of 850 million to get out of the German and South Korean markets. This will not show up in the balance sheets next year.
Lastly, let us look at the margin of safety provided by the two stocks. Walmart provides about 20% margin of safety where as Microsoft provides no margin of safety at current prices.