Chromebooks or Windows: The Best Solution- Google Inc (GOOG), Microsoft Corporation (MSFT)

Google Inc. (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) show market caps of $266.33 billion and $236.8 billion respectively. Microsoft’s P/E is 9.5 less than Google’s, and boasts a 11.7% FCF yield as opposed to Google’s 5%. With annual revenue increases for both companies over the past decade, Google’s revenues have increased 3,194% more than Microsoft’s. Year-to-date (YTD), Microsoft’s stock has increased 4.94% compared to Google’s 13.26%. While both stocks have outperformed their total return for last year, Google still performed 3.43% better in 2012. The chart below shows the past five year performances of each stock in comparison with the S&P 500.

GOOG data by YCharts

So, with Chromebooks not selling as many units as people had anticipated, what do Windows haters hope for? Well, believe it or not, Google Inc. (NASDAQ:GOOG) may be there best bet, just not with a Chromebook per se. Let’s not forget about Google’s second OS – Android. With over 750 million Android devices worldwide, the company announced that it would place both its Chrome/Chrome OS and Android efforts under the supervision of one senior vice president, Sundar Pichai.

It is believed (though just rumors) that Google may combine these products into a single OS, on which the Chrome browser could run. Seeing how quickly Android devices have been selling (and the underwhelming results of Chromebooks), this may explain why this combination would make sense.

The Foolish Conclusion…

So, is there a solution to what seems to be a hated (by many) Windows driven industry? It appears there could be in the future. For now, both companies present good buying opportunities for investors. Google Inc. (NASDAQ:GOOG) shows a steady track record with booming revenues, and Microsoft Corporation (NASDAQ:MSFT) appears to be very discounted. There may only be one good buy, however, if Google can develop an Android/Chrome based notebook.

The article Chromebooks or Windows: The Best Solution originally appeared on Fool.com and is written by Tyler Wofford.

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