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Would you rather lend your money to Microsoft or the U.S. government? That’s the big question when comparing Microsoft bonds vs. U.S. Government bonds. 📬 Sign up for Kyle's weekly newsletter, The CFO Signal: https://www.atlaswa.com/get-the-signal

*This content is for informational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.

Right now, Microsoft is offering about 0.5% more interest than the U.S. government for a 30-year bond. But is that small bump in return worth the risk?

When it comes to financial stability, Microsoft has a clear edge. Their interest coverage ratio, which measures how easily a company can pay its debt, is about 50 times what they owe. The U.S. government, on the other hand, sits at just 5.2 times. At first glance, Microsoft seems like the safer option. But here’s the catch. Unlike Microsoft, the government has the ability to print money to cover its debts. That’s why U.S. bonds have long been considered "risk-free," but with inflation and political uncertainty in the mix, that safety net isn’t as strong as it once was.

Microsoft is financially strong, but no company is invincible. U.S. bonds are stable, but the returns are disappointingly low. Instead of choosing between the two, investors should step back and ask, "Am I really being compensated for the risk I’m taking?