Originally Posted by mstone
Again, please look at ALL the numbers. GOOG and AAPL have almost identical net profit margins of around 24%. Apple is a much larger company than Google.
Yeah, Google doesn't really mfg anything. They aren't in the same SEC sector as Apple. Apple is actually considered a Personal Computing mfg and Google is more internet services. Different Sector. In addition, Apple has just shy of 1 Billion shares and Google has about 330 Million shares, so restructure all of the Google numbers and compare based on the same number of shares outstanding and Google doesn't look so good. Google is also on a VERY slow growth rate. Apple has gone from a log growth rate, which obviously can't last forever and it's just slowing down since last year and that's part of the economy of what's going on in the industry. Apple has also had product availability as an issue as it took Apple a while to get the iPhone 5, iPad mini, iMac product lines to ship to the demand levels. Apple also didn't have any new product announcements last quarter, so that had a little impact.
I'm not worried for the long term of Apple. I'm sure they will easily get at least a 20 to 35% growth rate per year, which suggests that the Stock will at least double within the next 2+ years, which is what some shareholders are looking at.
Apple is also going through their "getting away from Samsung" which will take at least a year or two to do the major share of that transition. They are also investing a LOT of money in new panel and processor mfg with their business partners which sucks up cash.
In terms of which stock would I invest in? From a standpoint of what the potential growth rate is over the next 2 to 3 years, what stock is over/undervalued and which do I have more confidence in? I would pick Apple right now. They not only are paying a decent dividend, which will increase, they are WAY undervalued trading at a P/E of less than 10, whereas Google is trading at a very high P/E ratio. Google hasn't proven themselves at making much, if any, profit from hardware sales. if anything, that's a lost leader for them. Motorola lost $330 Mil last December quarter, so that hasn't panned out yet. I'm not very confident in Google Chromebooks making much money, Google Glass seems like a waste of time and I don't much in the future for Goole making much money from hardware and software sales. It's all pretty much ad revenues and some coming from services. BFD.