Apple vs. Facebook: Both Deliver Earnings Beats, But Which Is the Better Buy?

Compare fast-growing Facebook with the proven value of Apple.

Apple (AAPL) reported earnings after market close today, beating expectation for revenue and earnings — hauling in $2.91 a share on $62.9 billion in revenue against Refinitiv consensus estimates of $2.78 a share on $61.57 billion in revenue — only to see shares dip almost 4.5 percent early in after-hours trading, possibly in reaction to lower-than-expected iPhone sales.

Meanwhile, Facebook (FB) founder and CEO Mark Zuckerberg said during his own company’s earnings call on Tuesday — when he reported earnings of $1.76 a share for the third quarter that beat analyst expectations of $1.46 a share — that he viewed Apple as the social network’s “biggest competitor by far” in terms of messaging.

So if these two behemoths really are competitors, which one is the better investment for you?

Apple vs. Facebook Stock Comparison

Here’s a basic comparison of Apple and Facebook:

AAPLFB
Share Price$222.22$151.75
Market Cap$1.1 trillion$438.1 billion
Most Recent FY Revenue$229.2 billion$40.7 billion
Most Recent FY Profits$48.4 billion$15.9 billion
Most Recent FY Revenue Growth6.3%47.09%
Most Recent FY Profit Growth5.83%55.96%
GOBankingRates’ Net Worth Evaluation$492.9 billion$138.4 billion
P/E Ratio20.1323.48
P/S Ratio4.29.03
Stock Gain/Loss Last Month-1.56%-7.73%
Stock Gain/Loss Last Year33.45%-15.72%

All market data accurate as of market close on Nov. 1, 2018.

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Why You Might Pick Apple:

  • It might seem a bit odd to call a $1 trillion company a “value buy,” but it’s certainly fair when weighed against Facebook: Apple’s PE ratio of 20.13 and PS ratio of 4.2 both compare favorably to levels of 23.48 and 9.03 for Facebook.
  • Apple’s return on equity of 45.37 percent is much better than Facebook’s 26.14 percent, potentially indicating that they’re more efficient in deploying company resources to create profits.
  • Apple’s dividend, while arguably somewhat modest at a 1.37 percent yield, still beats Facebook as the social media giant doesn’t pay one.

Why You Might Pick Facebook:

  • Although Apple’s current profit and revenue figures blow Facebook’s out of the water, Facebook’s growth rate is much better, adding about 50 percent to both earnings and sales in 2017.
  • And although Facebook’s price ratios are currently weaker, it might be a better value buy when you factor in that growth based on its PEG ratio of 1.13 to Apple’s 1.59.
  • Facebook is beating Apple on margins, with an operating margin of 49.05 percent and profit margin of 39.32 percent compared to 26.6 percent and 21.98 percent for Apple.

The Final Word on Apple vs. Facebook

Apple got to that $1 trillion market cap by demonstrating itself to be a profit machine for years, and it’s still arguably pretty reasonably priced based on those earnings. However, Facebook sports much superior growth as a stock earlier in its life cycle and could ride that growth to continued returns for shareholders.

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This article is produced for informational purposes only and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Please always conduct your own research and consider your investment decisions carefully.