Apple vs Microsoft Which Outperforms?

Apple and Microsoft are two of the most well-known and valuable technology companies in the world. Both firms have been leading players in the industry for decades and have consistently shown strong financial performance. Their stocks are heavily traded on the stock market and are closely watched by investors and analysts. Throughout the years, both companies have gone head-to-head in competition, innovation, and market share, making their stocks a popular choice for investors looking to capitalize on the ever-evolving technology sector.

Apple or Microsoft?

When comparing Apple and Microsoft, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Apple and Microsoft.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Apple has a dividend yield of 0.4%, while Microsoft has a dividend yield of 0.69%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Apple reports a 5-year dividend growth of -19.56% year and a payout ratio of 16.25%. On the other hand, Microsoft reports a 5-year dividend growth of 10.16% year and a payout ratio of 24.63%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Apple P/E ratio at 40.16 and Microsoft's P/E ratio at 36.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Apple P/B ratio is 66.10 while Microsoft's P/B ratio is 11.55.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Apple has seen a 5-year revenue growth of 0.82%, while Microsoft's is 0.99%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Apple's ROE at 137.87% and Microsoft's ROE at 34.56%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $246.24 for Apple and $445.58 for Microsoft. Over the past year, Apple's prices ranged from $164.08 to $250.80, with a yearly change of 52.85%. Microsoft's prices fluctuated between $366.28 and $468.35, with a yearly change of 27.87%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.