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When it comes to tech innovations and investment returns, Apple and Microsoft are two of the top companies people trust. Given that they’re established tech giants, the chief investment officer of Greenwood Capital states that expectations are high. The two companies, along with Alphabet and Amazon, gained between 5-7% in the previous month. And this is surprising given that the COVID-19 Delta variant is a wildcard for the nation’s future economic outlook.
In fact, investors consider Apple and Microsoft stocks as safety nets because they are two of the largest U.S. companies in terms of market value. But even if these tech giants have established names, it is still important to assess the pros and cons before investing in them. That said, here are all the factors that you need to consider.
Factors to Consider Before Investing
Company Performance
Looking into a company’s performance is essential since this affects the values of its stocks. Therefore, the market values of both Apple and Microsoft are still influenced by consumer behavior. As a general rule of thumb: the more they earn, the better their stock prices.
This year, Microsoft’s revenue grew by 21%, while Apple’s product sales rose by more than 12%. Though the former shows great results, Alex Zukin of Wolfe Research emphasizes that their performances are linked. The Microsoft analyst stated that Apple products serve as a vehicle for Microsoft’s success because their operating systems are integrated into MacBooks and iMac computers. Despite this year’s numbers, analysts Jim Suva and Ami Daryanani also believe that Apple has plenty of potential for growth because of its excellent company performance. Apple has established a positive reputation among its loyal consumers, which means it will be able to sustain this growth.
Return on Investment
Besides considering performance, it’s also important to look into the returns these companies can offer. Currently, Microsoft stocks are more expensive than Apple’s, since they cost around $300 each. For this high price, you’ll be guaranteed an ROI of around 25%, according to CSIMarket. However, their steady performance makes it well worth the investment, especially since the company shows no signs of slowing down.
On the other hand, Apple provides a cheaper option, but with a more promising ROI. It’s currently at 38.89%, based on CSIMarket data. Their stocks are also less expensive since you can buy them for about $150. And though Apple’s shares declined this year, it is worth noting that they have risen in value by roughly 400% in the past five years. In fact, billionaire Warren Buffet is one of the investors who made great returns from Apple’s growth in the past five years. And because he trusted in the company, Apple is now one of Buffet’s largest investments.
Dividend Payments
Dividend payments are an advantage that you can enjoy from investing in blue-chip stocks from Microsoft and Apple. These blue-chip stocks are just one of the investment products and assets covered in the investment articles on AskMoney. In fact, one of their articles on the subject points out that only the best-performing companies in the country can offer these assets. Due to their stellar market performance, these companies can offer blue-chip stocks that come with unique perks like dividend payments.
Since Apple and Microsoft have high revenues, they can offer regular dividends to shareholders that hold their stocks over a period of time. The former currently has a lower dividend payout, since it promises a quarterly payment of about $0.2 per share. On the other hand, Microsoft offers an annual dividend of $2.24 per share, making it the more appealing option in this regard. Furthermore, Microsoft’s earnings-per-share have a higher growth rate as compared to its counterpart.
Which is the Better Buy?
With all that said, the better buy ultimately depends on your risk profile and goals as an investor. Investors with a short-term horizon and a low-risk profile will benefit from Microsoft since it offers consistent growth and great dividends. On the other hand, if you are a risk seeker with a longer-term horizon, Apple has the potential for big returns in the long run.
To choose the best stocks for your investor profile, check out the rest of the content on Stock Dividend Screener. We have extensive posts that can help you learn and keep up-to-date on the latest investment news.
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Disclosure
The content in this article is for informational purposes only and is neither a recommendation nor a piece of financial advice to purchase a stock.
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