Facebook Inc (FB), Apple Inc. (AAPL): This Is Beginning to Get Boring

Facebook investors should probably start to question if the company will meet analysts’projections. The average analyst expects EPS growth of 29.19% over the next five years. Based on the company’s results of the last few quarters (essentially flat earnings growth), a 29% increase in EPS seems like a pipe dream. With shares trading for over 42 times full year 2013 estimates, I’m afraid investors are hoping for growth that won’t be achieved.

So What Should Investors Do? There are several options for investors tired of waiting for Facebook Inc (NASDAQ:FB). Google is already growing EPS, has nearly the same margins as Facebook, and between Gmail, YouTube, and all their other services, rivals Facebook’s total user base. Since Google sells for just 19 times forward estimates, its nearly 15% expected EPS growth rate seems reasonably priced.

For investors who prefer a good yield, you could choose between Microsoft or Apple Inc. (NASDAQ:AAPL). Both companies pay a yield of about 2.7%, and they both sell for forward P/E multiples in the low double-digits. However, while Microsoft is expected to grow earnings by about 8.5%, Apple is still expected to post a better than 20% increase.

I’m not sure what Facebook Inc (NASDAQ:FB) is waiting on. The company’s user count has never been higher, and the company can’t assume that users will continue to stick with the site forever. Newer options like tumblr, Pinterest, and others, threaten to steal users away. Existing companies like Google and Microsoft are revamping their Gmail and Outlook sites to increase engagement and become more social. If Apple Inc. (NASDAQ:AAPL) ever does pull the trigger on a big social networking deal, there could be millions of users at stake. Facebook’s time to capitalize on its user base is now. If the company can’t generate significant profit growth from a billion users, I’m afraid it never will.

Chad Henage owns shares of Apple and Microsoft. The Motley Fool recommends Apple, Facebook, and Google. The Motley Fool owns shares of Apple, Facebook, Google, and Microsoft. Chad is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited. The article This Is Beginning to Get Boring originally appeared on Fool.com and is written by Chad Henage.

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