Apple (NASDAQ:AAPL) & Western Digital (NASDAQ:WDC) Head to Head Survey

Apple (NASDAQ:AAPL) and Western Digital (NASDAQ:WDC) are both large-cap technology companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Dividends

Apple pays an annual dividend of $1.08 per share and has a dividend yield of 0.3%. Western Digital pays an annual dividend of $0.60 per share and has a dividend yield of 0.2%. Apple pays out 12.0% of its earnings in the form of a dividend. Western Digital pays out 2.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Apple has raised its dividend for 14 consecutive years. Apple is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

67.7% of Apple shares are owned by institutional investors. Comparatively, 92.5% of Western Digital shares are owned by institutional investors. 0.1% of Apple shares are owned by insiders. Comparatively, 0.2% of Western Digital shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Apple and Western Digital, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apple	3	14	24	2	2.58
Western Digital	0	5	21	2	2.89

Apple currently has a consensus target price of $343.74, indicating a potential upside of 0.40%. Western Digital has a consensus target price of $591.04, indicating a potential upside of 124.06%. Given Western Digital’s stronger consensus rating and higher possible upside, analysts clearly believe Western Digital is more favorable than Apple.

Profitability

This table compares Apple and Western Digital’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apple	27.60%	128.88%	34.36%
Western Digital	69.20%	55.62%	33.13%

Volatility & Risk

Apple has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500. Comparatively, Western Digital has a beta of 2.27, meaning that its stock price is 127% more volatile than the S&P 500.

Earnings & Valuation

This table compares Apple and Western Digital”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apple	$478.83 billion	10.43	$112.01 billion	$8.97	38.17
Western Digital	$12.92 billion	7.64	$9.42 billion	$25.77	10.24

Apple has higher revenue and earnings than Western Digital. Western Digital is trading at a lower price-to-earnings ratio than Apple, indicating that it is currently the more affordable of the two stocks.

Summary

Apple beats Western Digital on 9 of the 17 factors compared between the two stocks.

About Apple

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod. It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts. In addition, the company offers various services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California.

About Western Digital

Western Digital Corporation develops, manufactures, and sells data storage devices and solutions in the United States, China, Hong Kong, Europe, the Middle East, Africa, rest of Asia, and internationally. It offers client devices, including hard disk drives (HDDs) and solid state drives (SSDs) for desktop and notebook personal computers (PCs), gaming consoles, and set top boxes; and flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications. The company also provides enterprise HDDs; enterprise SSDs consisting of flash-based SSDs and software solutions for use in enterprise servers, online transactions, data analysis, and other enterprise applications; and data storage platforms. In addition, it offers external HDD storage products in mobile and desktop form; client portable SSDs; removable cards that are used in consumer devices comprising mobile phones, tablets, imaging systems, and cameras and smart video systems; universal serial bus flash drives for use in the computing and consumer markets; and wireless drive products used in-field backup of created content, as well as wireless streaming of high-definition movies, photos, music, and documents to tablets, smartphones, and PCs. The company sells its products under the Western Digital, SanDisk, and WD brands to original equipment manufacturers, distributors, dealers, resellers, and retailers. Western Digital Corporation was founded in 1970 and is headquartered in San Jose, California.