Apple Inc. (AAPL)vs Mastercard Incorporated (MA)

Quick verdict

Apple Inc. (AAPL) and Mastercard Incorporated (MA) appeal to different investors. On our six-factor framework, AAPL scores 5 and MA scores 1. AAPL looks cheaper on the multiples that matter, while AAPL grows faster and AAPL earns higher returns on capital. Overall, AAPL edges this comparison, but the right pick depends on whether you prioritise value, growth, income or balance-sheet safety.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Apple Inc. operates in Consumer Electronics (Technology), while Mastercard Incorporated sits in Credit Services (Financial Services). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. AAPL carries a beta of 1.10 versus 1.89 for MA, meaning MA has historically been the more volatile of the two.

Valuation

On valuation, AAPL is the cheaper stock. AAPL trades on a forward P/E of 26.84 and EV/EBITDA of 30.81, against 28.34 and 18.62 for MA. Price-to-sales is 10.83 vs 18.02, and free-cash-flow yield is 3.6% vs 0.9%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

AAPL is the faster grower. AAPL has compounded revenue at 6.4% over three years with EPS growth of 22.6%, while MA has delivered 9.5% revenue and 8.3% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, AAPL is stronger. AAPL posts a 32.6% operating margin, 146.7% return on equity and 49.6% return on invested capital. MA posts 14.1%, 43.2% and 9.8% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

AAPL has the safer balance sheet. AAPL carries net-debt/EBITDA of -1.50x with a current ratio of 1.07, versus 3.49x and 1.86 for MA. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year AAPL returned 73.5% against 28.9% for MA; on a three-year annualised basis it is 27.2% vs 5.9%. AAPL yields 0.3% and MA yields 0.0%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, AAPL is the better fit on today's multiples. Growth investors will likely prefer AAPL, which is expanding faster. Income investors should lean toward MA for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour AAPL for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: AAPL
• Growth: AAPL
• Income: MA
• Quality: AAPL

Frequently asked questions

Is AAPL or MA the better buy right now?

Neither is universally "better." AAPL scores 5 and MA scores 1 on our six-factor framework. AAPL is cheaper, AAPL grows faster, and AAPL is higher quality — so the right pick depends on your objective.

Which stock is cheaper, AAPL or MA?

AAPL is the cheaper stock across forward P/E (26.84 vs 28.34), EV/EBITDA (30.81 vs 18.62) and price-to-sales (10.83 vs 18.02).

Which has grown faster, AAPL or MA?

AAPL has the stronger growth profile, with three-year revenue CAGR of 6.4% for AAPL versus 9.5% for MA.

Which stock pays a bigger dividend?

AAPL yields 0.3% and MA yields 0.0%, so MA is the stronger income choice.

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