Apple Inc. (AAPL)vs Visa Inc. (V)

Quick verdict

Apple (AAPL) and Visa (V) represent two distinct high-quality franchises. Apple trades at a trailing P/E of 39.53 versus Visa's 30.97, though on forward earnings Visa looks considerably cheaper at 13.93x versus Apple's 26.84x. Apple shows stronger recent growth, with a 5-year revenue CAGR of 29.32% and 5-year EPS CAGR of 39.1%, compared with Visa's 10.34% and 10.84% respectively. Apple's profitability metrics are exceptional, including a return on equity of 146.69% and net margin of 27.15%, while Visa posts a higher net margin of 51.68% and gross margin of 81.29%. Momentum favours Apple over one year (73.53% return versus 68.04%) and three years (27.16% annualised versus -8.29%). Both carry an overall quality verdict of A, but Apple scores 5 on the overall scale versus Visa's 1, reflecting differences across the assessed categories.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Apple designs, manufactures, and sells consumer electronics including iPhones, Macs, and wearables, alongside services, generating revenue primarily through hardware sales supplemented by a growing services segment. Visa operates a global payments technology network, earning revenue from transaction processing fees rather than lending, which underpins its notably higher gross margin of 81.29% versus Apple's 47.86%. Visa's asset-light, toll-booth-style model contributes to an operating margin of 61.12%, well above Apple's 32.64%. Apple's business is more capital-intensive and cyclical, tied to hardware upgrade cycles and consumer discretionary spending, whereas Visa's model is more transaction-volume-driven and tied to broader consumer spending and card usage trends globally.

Valuation

On trailing earnings, Apple's P/E of 39.53 sits above Visa's 30.97, and Apple's price-to-sales ratio of 10.66 is lower than Visa's 15.85. However, on forward earnings the gap flips: Apple trades at 26.84x forward earnings versus Visa's 13.93x, suggesting the market expects more near-term earnings growth from Apple. Apple's PEG ratio of 1.37 is below Visa's 2.02, indicating growth-adjusted valuation may be more favourable for Apple. Apple's price-to-book of 45.27 vastly exceeds Visa's 19.09, though this partly reflects Apple's asset-light balance sheet structure. Apple's EV/EBITDA of 30.32 is higher than Visa's 24.27. The overall valuation verdict is B for this pairing, with Visa flagged as better suited to value-oriented considerations.

Growth profile

Apple has demonstrated stronger growth across most horizons, with a 5-year revenue CAGR of 29.32% versus Visa's 10.34%, and a 5-year EPS CAGR of 39.1% compared with Visa's 10.84%. Over the shorter 3-year window, Apple's revenue CAGR of 6.43% trails Visa's 11.34%, though Apple's 3-year EPS CAGR of 22.59% still exceeds Visa's 4.93%. This suggests Apple's earnings growth has outpaced revenue growth, potentially aided by margin expansion and buybacks, while Visa's growth has been steadier but more modest. The growth verdict for this comparison is A, aligned with Apple's designation as the stronger growth candidate in the bestFor breakdown.

Profitability and quality

Visa demonstrates superior margin structure, with a gross margin of 81.29%, operating margin of 61.12%, and net margin of 51.68%, all exceeding Apple's respective 47.86%, 32.64%, and 27.15%. However, Apple's return on equity of 146.69% dramatically outpaces Visa's 58.9%, and Apple's return on invested capital of 49.57% also exceeds Visa's 32.73%. These figures reflect Apple's more leveraged capital structure and aggressive capital returns amplifying equity returns, versus Visa's inherently higher-margin, asset-light payments model. Both companies carry a quality verdict of A, indicating strong fundamentals across profitability measures despite their differing structural characteristics.

Balance-sheet risk

Apple holds cash of approximately $67.9 billion against total debt of $76.2 billion, yielding a net debt/EBITDA ratio of -1.5, indicating a net cash position relative to earnings. Visa holds $31.9 billion in cash against $14.1 billion in debt, with a net debt/EBITDA of 1.59. Apple's current ratio of 1.07 is marginally below Visa's 1.09. Visa's interest coverage of 22 is substantially stronger than Apple's 3.19, suggesting greater capacity to service debt obligations from operating earnings. Both balance sheets carry an A verdict, though the underlying leverage profiles differ, with Apple more net-cash oriented and Visa showing wider interest coverage.

Price performance and shareholder returns

Apple has outperformed Visa over most recent periods, returning 58.09% year-to-date versus Visa's 18.25%, and 73.53% over one year against Visa's 68.04%. Over three years annualised, Apple gained 27.16% while Visa declined 8.29%. Over five years annualised, however, Apple's return of -0.6% trails Visa's 12.79%, indicating Visa has been the stronger long-term performer despite recent underperformance. Apple's maximum 5-year drawdown of -19.47% was shallower than Visa's -25.42%. Apple's beta of 1.097 indicates slightly higher volatility relative to the market than Visa's beta of 0.754, consistent with the differing drawdown profiles observed.

Which stock fits which investor

Based on the supplied verdicts, Apple is identified as better suited for growth, income, and quality-oriented considerations, carrying an overall score of 5 and a style tag of high-quality. Visa is flagged as better suited to value-oriented considerations, carrying a style tag combining value and high-quality, with an overall score of 1. Investors weighing recent growth metrics, such as Apple's 5-year EPS CAGR of 39.1%, alongside forward valuation, where Visa's 13.93x forward P/E is notably lower than Apple's 26.84x, may find the two companies appeal to different priorities within a quality-focused comparison.

• Value: V
• Growth: AAPL
• Income: AAPL
• Quality: AAPL

Frequently asked questions

Which stock has better valuation metrics, AAPL or V?

On forward P/E, Visa is cheaper at 13.93x versus Apple's 26.84x. On trailing P/E, Apple's 39.53 is higher than Visa's 30.97. Apple's PEG ratio of 1.37 is lower than Visa's 2.02. The overall valuation verdict for this comparison is B, with Visa identified as the better fit for value-focused considerations.

Which company has grown faster, Apple or Visa?

Apple has shown stronger growth over 5 years, with a revenue CAGR of 29.32% and EPS CAGR of 39.1%, compared with Visa's 10.34% and 10.84% respectively. Over 3 years, Visa's revenue CAGR of 11.34% edges out Apple's 6.43%, but Apple's EPS CAGR of 22.59% remains higher than Visa's 4.93%.

How do the balance sheets of AAPL and V compare?

Apple carries a net debt/EBITDA of -1.5, reflecting a net cash position, against Visa's 1.59. Visa's interest coverage of 22 is much stronger than Apple's 3.19. Both companies received an A verdict on balance sheet strength, though their leverage and coverage profiles differ.

Which stock has performed better historically?

Apple outperformed over 1 year (73.53% vs 68.04%) and 3 years annualised (27.16% vs -8.29%), while Visa outperformed over 5 years annualised (12.79% vs -0.6%). Apple also had a shallower 5-year maximum drawdown of -19.47% compared with Visa's -25.42%.

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