Hewlett-Packard Company (HPQ), Microsoft Corporation (MSFT), Google Inc (GOOG): Which Tech Giants Should We Invest In?

At the current trading price, Microsoft offers investors a sweet dividend yield of 2.60%. Looking forward, Microsoft should continue to deliver decent operating performance, especially in the Business Division. If Microsoft concentrates its efforts on expanding its Business Division, it will be much stronger.

Google and its dominating position in many markets

In the technology field, GoodHaven Fund also likes Google Inc (NASDAQ:GOOG), the global leader in the search industry. Although Google has not officially entered China, the biggest search market in the world, it still owns as much as a 66.5% market share of the global search market. Furthermore, Google also has market-leading position in display advertising and smartphone operating system.

In a $15 billion U.S. display ad market in 2012, Google Inc (NASDAQ:GOOG) was the leader with 15.1% market share, higher than the 14.6% market share owned by Facebook Inc (NASDAQ:FB). According to eMarketer, Google’s display ad market share is estimated to grow to 20.7% in 2014. In the smartphone operating system market, Google is also the leader with the Android operating system, representing around 52% of the market.

The market values Google Inc (NASDAQ:GOOG) at as much as 14.85 times its trailing EBITDA. I expect that Google Inc (NASDAQ:GOOG) will continue to deliver good returns to its shareholders with constant innovation. With the upcoming release of Google Glass, Google should continue to be a hot technology stock.

My Foolish take

Personally, I like Microsoft Corporation (NASDAQ:MSFT) and Google Inc (NASDAQ:GOOG) because of their cash generating ability and strong cash-rich balance sheets. Microsoft should keep growing with its Microsoft Business Division while Google Inc (NASDAQ:GOOG), with its dominating position in search, display ad, and smartphone operating system, should be a good stock pick for long-term investors. Hewlett-Packard Company (NYSE:HPQ) could also rally in the near future. However, I am still worried about its high level of goodwill and intangible assets of as much as $35 billion, which are quite vulnerable to any future write-offs.

The article Which Tech Giants Should We Invest In? originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of Google and Microsoft. Anh 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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