Apple (AAPL) & Fusion-IO (FIO) Critical Review

Apple (NASDAQ: AAPL) and Fusion-IO (NYSE:FIO) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, earnings, institutional ownership, profitability, risk, dividends and analyst recommendations.

Insider & Institutional Ownership

60.3% of Apple shares are owned by institutional investors. 0.1% of Apple shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Apple and Fusion-IO’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apple 20.87% 35.40% 14.00%
Fusion-IO -30.49% -26.35% -20.81%

Valuation and Earnings

This table compares Apple and Fusion-IO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Apple $223.51 billion 3.60 $70.21 billion $8.80 17.73
Fusion-IO N/A N/A N/A N/A N/A

Apple has higher revenue and earnings than Fusion-IO.

Dividends

Apple pays an annual dividend of $2.52 per share and has a dividend yield of 1.6%. Fusion-IO does not pay a dividend. Apple pays out 28.6% of its earnings in the form of a dividend. Fusion-IO has raised its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Apple and Fusion-IO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apple 0 7 41 0 2.85
Fusion-IO 0 0 0 0 N/A

Apple currently has a consensus target price of $193.09, suggesting a potential upside of 23.79%. Given Apple’s higher possible upside, equities analysts clearly believe Apple is more favorable than Fusion-IO.

Summary

Apple beats Fusion-IO on 9 of the 11 factors compared between the two stocks.

Apple Company Profile

Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company distributes its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp.

Fusion-IO Company Profile

Fusion-io, Inc. provides solutions for enterprises, hyperscale datacenters, and small to medium enterprises (SMEs), that accelerates databases, virtualization, mission-critical applications, cloud computing, big data, and information systems. Its hardware and software platforms and solutions enable the acceleration of data and applications. It sells its solutions through a global direct sales force, original equipment manufacturers. The Company’s portfolio of storage memory products packages ioMemory hardware combined with its VSL software into a family of products suitable for direct, shared, and cached acceleration environments. Direct acceleration is provided by its ioDrive, ioScale, and ioFX enterprise grade PCIe-products that leverage flash and are placed in x86 servers or workstations to directly accelerate locally hosted applications. Its shared acceleration is provided by its ION Data Accelerator or ioControl software combined with ioMemory, VSL, and industry-standard servers.

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