Apple Vs. Microsoft Stock: Which One Is Really Best and Why?

Both Apple and Microsoft are among the top technology companies in the world along with Alphabet (Google), Amazon, Facebook, etc.

In this article, I will not detail Apple & Microsoft – products, services, revenue streams, etc. Instead, the sole purpose of my article is to compare the two stocks with the raw data available. No technical charts, futures, nothing forecasting.

So which of the two is a clear winner and returns more value to investors over time? To find out, keep reading. It’s not a long article anyway.

In this article, all I intend to do is compare apples to oranges 🙂 That’s right. Let’s compare Apple stock to Microsoft stock and find out which one has performed better over time and is actually better than the other in comparison. (BTW, quick disclaimer, I personally love and use both companies’ products, I also own both stocks 🙂

Let’s get started.

Apple Vs. Microsoft Stocks

First of all, when you look at the quarterly or annual reports (Investor Relations section) of Apple and Microsoft stocks, you may notice several things:

1. Both of these companies are very cash rich, with hundreds of billions of euros accumulated each year.

2. These two companies are extremely well diversified and don’t rely on just one source of income. When it comes to Apple, you have the products, services, Apple Music, accessories, etc. For Microsoft still its products, revenues from Azure or cloud services, Bing advertising, etc.

3. Both are companies worth trillions of dollars, competing for the richest companies in the world. One usually goes up while the other goes back.

4. Their products are loved by the masses and sales never seem to wane or drop. Example – iPhones and Windows, Office 365, etc.

5. Both were founded by product visionaries considered industry legends: Steve and Bill.

6. Both of these stocks, Apple and Microsoft, pay extremely low dividends, at 1%.

There you go, this list wasn’t complete, but a few high liners I could think of.

You all know Apple and Microsoft, we use their products all day long so let’s stop there. The purpose of this article is not that.

Let’s actually start with the stock comparison and returns 🙂

Apple Vs. Microsoft: market capitalization and quick statistics

Before we proceed to compare stocks, let’s look at the fundamentals of the stocks:

Apple and Microsoft are almost equal in terms of market capital; Apple is a bit more now, but again, it always varies.

Microsoft stock is better in terms of P/E ratio.

Take a look at that dividend yield, it’s disappointing 🙂

But why care about dividends from these companies, they are growth beasts, we’ll get to that in a second.

To summarize, there is not much difference in terms of stock fundamentals, both are great and wonderful technology product companies that run our lives. Period.

Stock returns

And I come back to my favorite section.

Today’s participants – Apple and Microsoft stocks 🙂

Alright, let the rounds begin.

Knockout 1: returns since the start of the year (Year-to-date reports)

I know 2020 is a disaster, with COVID-19 and millions of job losses. But does this affect these powerful blue chips? Of course, this is the case in product sales.

We’ve seen a huge drop in stock prices, especially Apple and Microsoft, right? Since then, the market has recovered almost to where it was in February. But are we there yet?

Watch below for yourself:

Since the start of 2020, with the whole COVID-19 pandemic and market decline, Apple has seen a staggering 12.93% return to date and with Microsoft it’s even better with a market return of 17.43%.

Now tell me, was there really a stock market crash? If yes, when? 🙂

Most stocks don’t even have that kind of return for an entire year when everything is going well, forget COVID-19 and falling sales, lockdown.

Let’s move on.

Knockout Stage 2:

Apple Vs. Microsoft – 6 months back

For the last 6 months, here is the stock market report for Apple and Microsoft:

Apple (AAPL): 16.97%

Microsoft (MFST): 18.31%

Nothing else to say than invest in one or the other today 😉 Aren’t the returns insane 🙂

Third knockout round:

Apple Vs. Microsoft – Returns for 1 year

Apple clearly dominates round 3.

Look at the returns on the chart.

Results of the third round:

Apple stock returns over the past year: 73.01%

Microsoft stock returns over the past year: 40.77%

Let me be clear, this does not mean that Microsoft’s stock is weaker than Apple’s. Wait until we get there and see why Microsoft ultimately wins! Patience is the key here 🙂

So for round 3, Apple dominates and wins! Well done Apple 🙂

Knockout Round 4:

Apple Vs. Microsoft: returns over 3 years

This is where things start to get a little more interesting! We look at more stable stock returns over 3 years.

Over the last 3 years,

Microsoft stock returned a whopping 304% while Apple returned 165%.

What does this mean for us?

In the longer term,

1. Microsoft is impeccable in terms of stock returns and easily beats Apple stock.

2. Let’s also not forget that these are the best tech companies in the world and the best stocks to own right now. Period.

So, at the end of the fourth round, Microsoft hits back hard at Apple and wins the round with long-term endurance and strength. Consistent double-digit quarterly growth with Azure (the cloud for growth) leading the way.

Knockout Stage 5:

Let’s wrap it up with the maximum time frame for stock returns. I mean the investment returns since these two companies first started trading.

Screenshot below:

Are you ready, people?

Since creation:

Microsoft stock has returned 154,233.33% year to date.

While for Apple, it is 41,389.80% as of today.

The ultimate winner here is Microsoft, based on available market data and facts.

Blue chip growth stocks vs. Dividend Stocks

If you are a young Canadian in your early 20s or 30s and you are just starting out, I sincerely urge you to invest in blue-chip companies.

It’s not Apple or Microsoft, or any of the big companies – American or Canadian.

Some of them. the best evergreen blue chips are: Facebook, Coca Cola, Nike, Nvidia, Amazon, Alphabet and the list goes on.

These are all huge blue-chip companies with an absolute beast in terms of earnings potential. They can withstand market declines and rise again over time.

Plus, these blue-chip stocks will easily beat your S&P 500 index funds, NASDAQ Top 100 index funds, or any other stock you can name. They are the ones who determine the market in terms of index weighting.

So what about dividend-only stocks?

Dividend stocks are good, there’s no doubt about that, for example, take Enbridge.

Enbridge (ENB) is a great stock with a quarterly dividend of over 7% and decent EPS growth of 15% on an annual basis over the last 5 years.

Let’s say you invest $10,000 today in ENB stock.

Over the next five years, these dividends could reach $15,000 in your TFSA or RRSP accounts. Is that all you want? Oh yes, ENB increases its dividends every year.

Ok, forget about ENB for a moment.

Take RBC, CIBC, BNS, Shopify, Dollarama, ZSP, VFV, XRE, XUS, XIC – can any of these stocks or the best of ETFs match the returns of Apple or Microsoft?

I bet they can’t.

So why be conservative?

What is the point you want to make?

What’s wrong with being aggressive when you have all the time in the world?

So, is something wrong with ETFs?

Absolutely not!

Personally, I also own ETFs. But I like growth stocks more.

This is where the majority of my money goes.

ETFs are good, they help you diversify. But that’s not all. GICs and bonds are also good. It all depends on what you want and the age allocation percentage.

The real problem with ETFs is that they hold hundreds or even thousands of stocks and track the entire index.

Even if you consider the best of the best S&P 500 index funds, including Canadian hedge funds, you’re still talking about a 15% return per year (max).

Invest in FB or Apple instead, I’m sure it will be more. It’s like all your money is growing with the best in class rather than the entire class where someone fails and your growth is hindered for the moment. Additionally, too many eggs in the basket (ETF) will spoil the entire basket. Can we focus on 100 students at the same time? Is this even possible? We have our favorites in everything, so why not stocks? Why take a conservative approach and wait for feedback?

Last but not least, Canadian bonds are also good, as are mutual funds and TD e-series. It all depends on what your goals are.

All I can say is make your investment count and invest in good growing companies for the long term.

Apple Vs. Microsoft Stocks: Conclusion:

In this article, I have taken a general approach to educate beginners/investors about the importance of investing in stocks of Bluechip companies such as Apple or Microsoft. I just took the fun side by using the terms KO like in Boxing rounds 🙂

Please don’t time the markets when investing in blue chip stocks and don’t expect heavy dividends here. If you need great dividend stocks, go for REITs like RioCan, ENB, Fortis, etc. or XRE ETF (pool of REITs in one location with more diversified REITs and one location)

When it comes to blue chips, they are massive growth stocks that can withstand any stock market crash. Market falls are always temporary and rebounding will be difficult.

You just need to invest and relax, forget about the investment for a few years. See for yourself the magic of composition.

That’s all for now, I hope you enjoyed the content. Let me know your thoughts and comments 🙂 Share and help spread the word.

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