Apple and Microsoft, both are amongst the best technology companies in the world along with Alphabet (Google), Amazon, Facebook, etc.
In this article, I will not be going through the Apple & Microsoft – products, services, revenue stream and so on. Instead, the sole purpose of my article is to compare both the stocks with raw available data. No technical charts, futures, forecasting nothing.
So which one amongst the two is a clear winner and returned more value over time to the investors? To find that out, keep reading. It’s not a lengthy post anyways.
In this article, all I am planning to do is comparing apples to oranges 🙂 That’s right. Let’s compare Apple stock to Microsoft and find out which one has returned better over time and is actually better than the other in comparison. (BTW, quick disclaimer, I personally love and use both company products, I also own both stocks 🙂 )
Let’s get started.
Apple Vs. Microsoft Stock
First of all, when you look at the quarterly or the annual reports (Investor relations section) of both Apple and Microsoft Stocks, you can notice a couple of things:
Both these companies are heavily cash-rich with 100s of billion piling up each year.
Both of these companies are extremely well diversified and do not rely on one source of income. When it comes to Apple – You have the products, services, Apple Music, Accessories and so on. For Microsoft its products again, Azure or cloud services revenue, Bing advertising and so on.
Both are trillion-dollar market companies, competing for the #1 and #2 richest companies in the world. One usually goes up while the other slides back in.
Their products are loved by the masses and sales never seem to decline or drop. Example – iPhones and Windows, Office 365, etc.
Both were founded by product visionaries who are considered legends of the industry – Steve and Bill.
Both these stocks Apple & Microsoft pay extremely low dividends at 1%’ish.
There you go, that list was not complete, but a few high liners which I could think of.
You all know about Apple and Microsoft, we use their products all day long so let’s stop it here. The purpose of this article is not that.
Let’s actually get started with the stock comparison and returns 🙂
Apple Vs. Microsoft: Market Cap and Quick Stats
Before we actually proceed with the stock comparison, let’s look at stock fundamentals:
Apple and Microsoft are almost levels in terms of Market Capital; Apple is slightly more now but again it’s always varying.
Microsoft stock is better in terms of the P/E Ratio.
Take a look at that Dividend yield, its a bummer 🙂
But why care dividends with these companies, they are growth beasts, we’ll get to that in a second.
To sum it up, not much of a difference in terms of the stock fundamentals, both are big massive and wonderful tech product companies ruling our lives. Period.
Stock Market Returns
And I’m back to my favourite section.
Today’s participants – Apple and Microsoft stocks 🙂
Alright then, let the rounds begin.
Knockout 1: YTD Returns (Year To Date Returns)
I know 2020 is a disaster, with COVID-19 and the job losses in millions. But does that affect these mighty blue-chips? Of course, it does in product sales.
We saw a huge drop in share prices especially Apple and Microsoft, correct? Since then the market has recovered to almost where it was in Feb. But, are we there yet?
Look below for yourself:
Since the start of 2020, with all the COVID-19 pandemic and the market drop, yet Apple returned a staggering 12.93% to date and with Microsoft, it’s even better at 17.43% market returns.
Now tell me was there really a market crash? If so when? 🙂
Most stocks don’t even have these kinds of returns for an entire year when everything’s alright forget COVID-19 and sales down, lockdown.
Knockout Round 2:
Apple Vs. Microsoft – 6 Months Return
For the past 6 months, here’s the Apple and Microsoft’s stock market report:
Apple (AAPL): 16.97%
Microsoft (MFST): 18.31%
Nothing more to say other than please invest in either of these today 😉 Ain’t the returns insane 🙂
Knockout Round 3:
Apple Vs. Microsoft – 1 Year Returns
Apple clearly dominates the round 3.
Look at the returns on the chart.
Round 3 Results:
Apple stock returns for the past 1 year: 73.01%
Microsoft stock returns for the past 1 year: 40.77%
Let me make it clear, this does not mean Microsoft’s stock is weaker than Apple. Hold on till we get there and see why Microsoft wins ultimately! Patience is the key here 🙂
So for round 3, Apple dominates and wins! Well done Apple 🙂
Knockout Round 4:
Apple Vs. Microsoft: 3-Year Returns
This is where things start to get a little more interesting! We are looking at the more stable, 3-year stock returns.
Over the past 3 years,
Microsoft stock has returned a whopping 304% while Apple returned 165%.
What does this mean to us?
Over the longer term,
Microsoft is flawless in terms of market returns and easily beats the Apple stock.
Also, let’s not forget that these are the best tech companies in the world and the best stocks to own right now. Period.
So by the end of round 4, Microsoft strikes back hard at Apple and wins the round with stamina and strength over the longer term. Consistent double-digit quarterly growth with Azure (Cloud serves growth) leading the front.
Knockout Round 5:
Let’s make this the final round with the maximum timeframe for stock market returns. I mean to say investment returns since both these companies started trading for the first time.
Are you ready people?
Microsoft stock has returned 154,233.33% to date.
While for Apple it is 41,389.80% to date.
The final winner here is Microsoft, based on the market data available and facts.
Blue Chip Growth Stocks Vs. Dividend stock
If you are a young Canadian in the early 20s or 30s and just starting out, I sincerely request you to invest in Blue chip companies.
It not Apple or Microsoft, any of the blue chips – US or Canadian.
Some of. the best evergreen blue-chips are: Facebook, Coca Cola, Nike, Nvidia, Amazon, Alphabet and the list goes on.
These all are massive blue-chip companies with an absolute beast in terms of earnings potential. They can resist the market falls and rise back higher with time.
Also, these blue-chip stocks will easily beat your S&P 500 Index funds, NASDAQ Top 100 Index funds or any stock you can name. They are the market drivers in terms of index weightage.
What About the Dividend Only Stocks then?
Dividend stocks are good, no doubt about it, for example, take Enbridge.
Enbridge (ENB) is a great stock with over 7% quarterly dividend and a decent 15% EPS growth YOY for the past 5 years.
Let’s say you invest $10000 today into ENB stock.
Over the next 5 years, it might grow to $15,000 dividends in your TFSA or RRSP accounts. Is that all you want? Oh yeah, ENB increases dividends every year.
Ok forget ENB for a moment.
Take RBC, CIBC, BNS, Shopify, Dollarama, ZSP, VFV, XRE, XUS, XIC – can any of these stocks or the best of the ETFs match the returns by Apple or Microsoft?
I bet they cant.
Then why be conservative?
What is the point you want to make?
What’s wrong in being aggressive when you have all the time in the world.
Is Something Wrong With ETFs Then?
I personally own ETFs too. But I love growth stocks more.
That’s where the majority of my money goes to.
ETFs are good, they help diversify. But that’s not everything. GICs and Bonds are good too. It all depends on what you want and the allocation percentage with age.
The real problem with ETFs is, they hold 100s or even 1000s of stocks and track the entire Index.
Even if you consider the best of the best S&P 500 Index funds, including the Canadian hedged funds, you’re still talking about 15% returns per year (max).
Instead, invest in FB, or Apple, I’m sure it will be more. It’s like your entire money is growing with the best in the class rather than the entire class where someone flunks and your growth is hampered for the moment. Also, too many eggs in the basket (ETF) will spoil the entire basket. Can we focus on 100 students all at the same time? Is that even possible? We have our favourites in everything, then why not stocks? Why the conservative approach and wait for the returns?
Last but not the least, Canadian Bonds are good too and so are Mutual Funds and TD e-series. It all depends on what are your goals are.
All I can say is make your investment count and invest for the long term in good growth companies.
Apple Vs. Microsoft Stock: Conclusion:
In this article, I took a general approach to educate newbies/investors on the importance of investing in Bluechip company stocks such as Apple or Microsoft. I just took the fun side by using the terms knockout as in Boxing rounds 🙂
Please do not time the markets when investing in blue-chip’s and don’t expect heavy dividends here. If you need excellent dividend stocks, go for REIT’s such as RioCan, ENB, Fortis, etc or XRE ETF (pool of REITs in one place with more diversified and one place all REITs)
When it comes to blue chips, they are massive growth stocks that can resist any market crash. The market falls are always temporary and the bounce back will be hard.
You just need to invest and relax, forget the investment for a couple of years. See the compounding magic for yourself.
That’s all for now, hope you enjoyed the content. Let me know your thoughts and comments 🙂 Please share and help spread the word.