Apple Inc. (AAPL): First Growth, Then Value, Now Income?

We often compare Apple to peers in the consumer technology business such as Google Inc (NASDAQ:GOOG) , but with the company’s value proposition to investors reportedly shifting it may be interesting to look at it against other large-cap technology companies paying high yields as well. Microsoft Corporation (NASDAQ:MSFT) happens to fit in both categories, and we’d also include Intel Corporation (NASDAQ:INTC) and Texas Instruments Incorporated (NASDAQ:TXN) as income plays in the tech sector.

Texas Instruments and Microsoft pay yields of 3.2% and 3.3% respectively, and each posts a beta slightly above 1 (meaning they tend to trade more in line with the market than Apple does (the beta there is 0.7). Microsoft’s forward P/E multiple is even with Apple’s at 9, although in the case of Microsoft we would suspect a temporary bump to earnings from new versions of Windows and Office. Texas Instruments experienced a double-digit decline in revenue and earnings in the fourth quarter of 2012 versus a year earlier.

Intel’s yield is above 4%, and it trades at 10 times earnings whether we consider historical results or forward estimates. That company does look better from an income perspective than Apple hypothetically would, but where Apple has growing revenue and weak margins resulting in flat earnings, Intel has actually been experiencing a slight decline in sales, which combined with shrinking margins brought net income down 27% in its most recent quarter compared to the same period in the previous year.

Google, meanwhile, is working on generating income growth both from its advertising business and from better integrating Motorola Mobility Holdings. The trailing P/E is high (reflecting Motorola’s somewhat weak performance when it was brought onboard) but Google currently trades at 15 times consensus earnings for 2014.

We do think that Google has more growth opportunities than Apple, but that may be fully accounted for in its premium pricing. From a dividend perspective, if Apple Inc. (NASDAQ:AAPL) does end up paying a 3.6% yield that would be quite competitive with other large tech companies: its business seems more stable than that of the three peers we looked at, though Intel would still pay a higher yield and would, like Apple, continue to have a value case as well.

The article Apple: First Growth, Then Value, Now Income? originally appeared on Fool.com and is written by Jake Mann.

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