Originally Posted by Constable Odo
I'd be happy to see Apple at $595 and I don't expect Wall Street to give Apple any leeway. Apple can't double its revenue, so maybe Apple's share price is going to have a low roof. I guess it can't be helped if the hedge funds stay away from Apple. I'll just have to hope for dividend raises twice a year to ease my discomfort knowing that Apple shares will never be worth as much as Google shares. Man, that pisses me off just typing it.
Here's how to REALLY analyze Apple stock vs Google stock.
Apple is currently trading at $467 a share (roughly speaking)
Google is currently trading at $885 a share (roughly speaking)
To people that don't understand how to evaluate a stock, one would THINK that Google's stock is worth more. Here's how they aren't. Apple is worth a LOT more than Google.
Apple has approximately 900,000,000 shares outstanding. That's 900 Million
Google has approxmiately 330,000,000 shares outstanding. That's only 330 Million.
Now, if you would multiply the number of share of Google from 330 Mil to 900 Mil, it would turn out to be AROUND 3x. I'll use 3x because it's easily to do the calculations.
So, Google's stock price would actually get divided by 3 to come up with the REAL share price if it's adjusted for the descrepancy of the number of shares outstanding. And the same would be done to the EPS (earnings per share).
So, here's what it would look like.
Apple Stock would remain around $467 a share.
Google (adjusted for shares outstanding) would be more like $295 a share.
Apple has $40 a share in earnings. (EPS)
Google would be adjusted to only $11 a share in earnings (EPS)
Now, if you look at the P/E ration, that's Price to Earnings. Apple is currently trading at a P/E of 11.65 which is actually verging on being a little undervalued.
Google is trading at 25.62 which many would think is a little overvalued.
Obviously, Apple has been around MUCH longer than Google, so it's a much more mature company, even though it still acts like a high growth company. But Apple does pay dividends whereas Google does not.
So, how do you look at each stock?
Do you think Google is going to go up by a higher percentage than Apple? I would suggest it won't. For Apple to go up by 30%, it just has to hit $600 a share (roughly speaking), but in order for Google to go up by 30%, it would have to hit $1153 in the same timer period. plus, with Apple stock, you would be getting a dividend on top of the 30% increase.
Now, both companies are in totally different business sectors. Apple is listed with the SEC as a personal computing company, whereas Google is listed as an internet services company. Google's sales tend to creep up because they are adding more services, but that's because people are using mobile devices more which is where they get more ad clicks, and other behind the scenes money in addition to paid content.
Apple's revenues are generated more by the sales of mostly hardware, s/w, content, services but not so much with the ad clicks and behind the scene revenue generation.
Which would I invest in as far as increasing my portfolio? I would probably look at Apple before I would look at Google at this point in time. Apple has a lot of products that are going to be released and HOPEFULLY they will have a dramatic increase this Dec quarter over last year's Dec quarter, etc.
Apple has several POTENTIAL revenue sources at play.
1. IF they sign on China Mobile which is POSSIBLE. That will be a dramatic increase in revenue/profits.
2. If they sign on DoMoCO, same thing will happen.
3. If they release an improved Apple TV box that allows for cable TV to be granted, that is a HUGE potential.
4. If they release a large screen iPhone, that's another potential increase in revenue's/profits.
5. If they release an actual HDTV smart TV, another huge potential increase.
6. Wearables. Would be another increase in revenue's/profits.
Each one of these can contribute a lot or a little to the overall revenue/ profit potential.
What does Google have as a potential revenue/profit source? Google Glass? PLEASE. They will sell some, but not necessarily that many over the long term. I think that will be a short term fad rather than a long term product. Motorola has been losing money and they might come out with their new Moto X phone, but it's not getting great reviews and Moto might loose money on it if they overspend on marketing/advertising costs. It's almost like their Hail Mary product if you will.
Google is trying to be an ISP, but I don't know how much revenue/profits they will actually see. It's only being announced in some cities and isn't getting widespread.