Apple Vs Google

Apple (AAPL), and Google (GOOG) are two of the most profitable and dominant technology companies in the world. Both companies are known for their ability to constanly innovate their way to more market share and profits. Apple and Google are both trail brazzers in the techology sector, one revolutionized comsumer electronic products and the other organized the web through web search. Both company has changed the way we connect to the internet, with friends, family, co-workers and how we interact with our devices.

Apple Inc. (AAPL)

Apple is multinational company headquartered in Cupertino, California, its in the business of designing, developing, and selling consumer electronics, computer software, and personal computers. The company's best known hardware product line is its Mac line of computers, the ipod, the iphone, and the ipad. Its consumer software line includes the OS X, and iOS operating system, iTunes, Safari browser, iLife and iWork creativity and productive suites. The iPhone and iPad have an compined market share of 54%. Apple is currently rated the most valuable brand in the world by Forbes, and the 15th largest corporation in the world. The company maintains 408 retails stores throughout 14 countries. In 2013 Apple had revenues of $170 billion. As of quarter one of 2014, Apple has an five year average growth rate of 39% for top line growth, and 49% growth for bottom line growth.

Apple's Valuation and Ratios

Price to Earnings (P/E)	12.82
Earnings Per Share (EPS)	$41.52
Next Year Expected EPS	$53.88
Sales Per Share	$191.61
Book Value Per Share	$138.51
Growth Rate	29%
Price to Book (P/B)	3.84
EV/EBITDA	6.43

Apple Inc. has an solid balance sheet with over $100 billion in cash on hand. A share repurchase program of $30 billion in place, and in the last few months has repurchased about $15 billion in shares. Carl Icahn (Trades, Portfolio) say that if Apple sold at the same average price-to-earning multiple as the S&P 500 its share price would be $840 which is 52% above its current price. The technology sector sell at a P/E of 18.70 which is higher then Apple at 12.82 times earnings. If Apples share sold at the same P/E as the Technology Sector its share price would be $776 or sold a the same multiple as the NASDAQ it would be $911 per share. This give Apple a share price range from $776 to $911.

Google Inc. (GOOG)

Google is an multinational company headquartered in Mountain View, California. The company specialize in internet-related services and products, that includes search, cloud computing, software and online advertising technology. Most of Google's profits are derived from Adwords. Google since Incorporations has had rapid growth that has triggered a chain of products, acquisitions and partnerships that goes beyond the company's core product search. The company offers online productivity software including, Gmail, Google Drive and Google Plus. Its desktop products includes Chrome Browser, and Instant Messaging. Google mobile operating system Android has an market share of 78.9%, making its operating system the most dominant in the world. In 2013 Google had revenues of $59 billion, profits of $12 billion, enterprise value of $22 billion and total assets of $110 billion. Google is the 5th most valuable brands in the world and in the top seventy most valuable corporation in the world.

Google's Valuation Ratios

Price to Earnings (P/E)	31.69
Earnings Per Share (EPS)	$38.45
Next Year Expected EPS	$45.02
Sale Per Share	$178.02
Book Value Per Share	$259.81
Growth Rate	17.09%
Price to Book (P/B)	4.69
EV/EBITDA	15.94

Google also has an solid balance sheet with about $50 billion in cash on hand. Google sell at a P/E ratio of 31.69 which is higher then the tech sector's of 18.70, and higher then the NASDAQ at 21.95. Google is selling at a premium over all of the stock exchanges in the United States, you'll better offer buy Vanguard Index Funds then Google. Based on the NASDAQ, Tech Sector, and S&P 500 P/E Google has a price range from $686 to $844 per share.

Compared Valuation of Apple and Google

Apple is ranking in over $37 billion a year in revenue compared to Google's annual income of 13 billion. Apples net income is three times that of Google, and has four times more cash on hand then the cash flow of Google. Apple at a P/E of 12 and Google at a P/E of 31 clearly shows which company is a better buy.

Compared Apple and Google Stocks Selling At Different P/Es

P/E Ratios	Apple Inc	Google Inc
Current Selling Price Based on P/E	$532	$1,218
S&P 500	$741	$686
NASDAQ	$911	$844
Tech Sector	$776	$719
Dow Jones Industrial Average	$671	$621

By using the P/E of the lead stock exchanges we can see a range of valuation for Apple and Google. These ranges of valuation show which company is overvalued and which one is undervalued. Based on compared valuation shows that Apple is undervalued term, while Google is overvalued selling at a P/E multiple that is higher then the leading exchanges.