Valuation
Samsung currently has a P/E of 10.4 and a dividend yield of 0.5% — both of which are lower than the industry average. Google doesn’t pay dividends to its shareholders, but its earnings yield and free cash flow yield are pretty solid. These figures are 3.8% and 4.3%, respectively. Google Inc (NASDAQ:GOOG) fans may give Apple’s cult-like followers a hard time with innovation, but they certainly can’t argue with the companies’ valuation.
With a P/E of 10.5, and virtually every other metric showing a cheaper buy than either Samsung or Google, Apple Inc. (NASDAQ:AAPL) fans can be certain of two things: cash and value. They are better valued than most companies, and have approximately $156 billion in available cash.
Innovation
Apple did announce plans to release iTunes Radio, but again, this wasn’t their idea. Pandora and other companies have been doing this for quite a while, but it will likely give Apple Inc. (NASDAQ:AAPL) yet another way to generate revenue. Google Inc (NASDAQ:GOOG) has an entirely new product in Google Glass, and Samsung is continuing to work on Smart TV’s and other interesting products. It is obvious Apple is trying to convey the idea that it has not lost its ability to innovate, but is it? This is yet to be seen. If it can successfully develop and release a product like an iWatch, many of its critics would be silenced.
Apple’s short-term future
Here is the deal. Apple Inc. (NASDAQ:AAPL)’s shareholders might not see the stock grow much in the next year or so, but they shouldn’t stray away because of this. The company plans to release $100 billion to shareholders by 2015, will likely experience revenue growth with some new products and services, and is building a “Spaceship” that should minimize other expenses. Personally, I don’t see the stock falling below $400 or rising above $500 any time soon, but with these other attributes, shareholders should be pleased.
The Foolish conclusion
Apple Inc. (NASDAQ:AAPL) and Google may be approaching their fight with each other in different ways, but the result is yet to be seen. Innovation may be on the rise for Apple, but it hasn’t exactly blown expectations away. It will be interesting to see how these companies respond to the boxing match that seems to be heating up.
Tyler Wofford has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG).
The article Apple Can Still Innovate, or Can It? originally appeared on Fool.com.
Tyler is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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