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Apple Inc. (AAPL), Google Inc (GOOG) or Microsoft Corporation (MSFT)? The Smartest Investment

Microsoft remains in control of traditional PCs, but is struggling in mobile

As an investment, Microsoft Corporation (NASDAQ:MSFT) is a bit of an enigma. While its flagship product, Windows, seems to be staring down the possibility of obsolescence, the company is well diversified through a multitude of other products.

Microsoft Corporation (NASDAQ:MSFT)’s Office remains an indispensable tool for the majority of white collar workers. Its lineup of video game consoles have become widely popular, and the next Xbox could double as a full entertainment hub, replacing the need for a smart TV.

As the Ballmer quote demonstrates, the company has been working on branching out into services, including its Bing search engine, Sky Drive, and a redesigned email system.

Since instituting its dividend, Microsoft Corporation (NASDAQ:MSFT)’s stock has traded in a tight range, mostly for the last decade. It seems likely that the trend could continue, as its dying businesses are replaced with new initiatives.

Google’s future looks the brightest, but you’ll have to pay for it

Ultimately, Google Inc (NASDAQ:GOOG) appears to have the brightest future of the three companies, but the stock isn’t cheap. Trading around $786, it isn’t that far removed from its all-time high. Both its PE ratio and forward PE ratio are higher than its competitors.

But Android has been steadily eating away at iOS’ market share, and as more devices hit the market, this trend seems likely to continue. That should mean more users for Google Inc (NASDAQ:GOOG)’s web services, and with more users comes more ad revenue.

Microsoft Corporation (NASDAQ:MSFT) is in the middle. Office is essentially a monopoly product, while its initiatives in services should offset a declining Windows.

As for Apple, despite being the darling of the tech world just a few months ago, the company is facing serious issues. Nearly all of Apple’s profit, and all of its growth, comes from the iPhone and iPad. Android-powered devices appear poised to do to these devices what Windows did the Macintosh in the late 1980s — push them into permanent minority status.

To be fair, Apple is trading at a bargain-bin valuation and has a mountain of cash. If the company’s management opts to return capital to shareholders, things could turn around quickly.

The article Apple, Google and Microsoft: Which is the Best Investment Right Now? originally appeared on Fool.com is written by Salvatore “Sam” Mattera.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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