Both companies reported higher top and bottom lines, and both trade for over $200 per share. There are many other similarities, for example, both sell digital content and the hardware to consume digital content. Both sell third-party content as well. Both companies have a worldwide marketing footprint and are household names. Amazon and Apple have the resources available to dominate most spaces they wish to enter.
However, the similarities end quickly once you lay financial pages next to each other. Apple is more than five times more valuable by market cap than Amazon. Amazon is a more stable stock by any standard and especially as a member of the technology space. Currently, neither company pays a dividend, but Apple will soon begin sharing the war chest of cash with investors.
Keep in mind that both companies just reported what was received as "strong" earnings, but in the last 12 months Apple produced $41 in earnings per share, while Amazon made $1.37. Apple's profit was 30 times greater than Amazon. If you bought one share of Apple and your neighbor bought one share of Amazon, you can take your neighbor to lunch and he can't even take care of the tip.Facebook Has No Business Being Compared to Apple, Google and Amazon >> To be fair, I need to point out the shares are not priced equally. Apple trades for about $600 a share while Amazon trades at a much lower price of $220. To make the comparisons easy, we look towards the price-earnings ratio to get a relative comparison. Amazon's share price is 160 times earnings trailing 12-month earnings, while Apple trades at 15 times earnings. Generally speaking, a lower P-E is better. I have an opinion on P-E ratios I will get to in a moment. Looking at past results is great for knowing where we have been, but if we want to see where we are going we need to take out the crystal ball and try our best to predict the future. As both companies clearly demonstrated, analysts' crystal balls where anything but clear. This is fine with a comparison between Apple and Amazon because the differences are so extremely far apart we can allow for plenty of wiggle room.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV