Garmin Ltd. (GRMN): This Company Needs to Innovate to Thrive

As you can see, playing it safe with Apple has been dangerous. That’s because it has been nearly impossible for Apple to keep up with its high expectations. Eventually, Apple will become a bargain, especially with one particular product that’s set to be released next year, but that’s a story for another time.

Google has hit many home runs, including Android, Google Search, Google Chrome, and yes, Google Maps. When Apple ruled Wall Street, Google quietly offered steady gains. Once investors began questioning Apple as an investment, many of those investors changed teams and sided with Google.

Currently, Google is trading at 26 times earnings, whereas Apple is trading at just 10 times earnings. Apple offers slightly better margins, and a yield of 3.10% versus no yield at all. However, investors want to go with momentum  and future potential. Google is now so diversified that growth is bound to come from somewhere. Apple is also diversified, but its entire universe is more connected.

If you don’t want to play it safe, then take a look at Garmin Ltd. (NASDAQ:GRMN). The good news is that the stock is only trading at 13 times earnings, margins are strong, and the yield currently sits at an impressive 5%. The bad news is that growth is slowing in what was once Garmin’s most reliable area.

Conclusion

Garmin Ltd. (NASDAQ:GRMN)’s near-term prospects aren’t good, but Garmin has a ton of cash, which will buy time and give the company an opportunity to come out with something that surprises the market. In the meantime, Garmin’s fiscally sound position will allow it to continue to return capital to shareholders, making it more of a dividend play than a growth play.

If you’re looking for broad product diversification, consider Google. If you’re looking for value, consider Apple.

The article This Company Needs to Innovate to Thrive originally appeared on Fool.com and is written by Dan Moskowitz.

Dan Moskowitz has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Dan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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