Analyzing Lenovo Group (OTCMKTS:LNVGY) and Apple (NASDAQ:AAPL)

Apple (NASDAQ:AAPL) and Lenovo Group (OTCMKTS:LNVGY) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.

Earnings and Valuation

This table compares Apple and Lenovo Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Apple	$391.04 billion	8.15	$93.74 billion	$6.42	33.23
Lenovo Group	$69.08 billion	0.22	$1.38 billion	$2.15	11.50

Apple has higher revenue and earnings than Lenovo Group. Lenovo Group is trading at a lower price-to-earnings ratio than Apple, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Apple has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Lenovo Group has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500.

Profitability

This table compares Apple and Lenovo Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Apple	24.30%	167.24%	31.35%
Lenovo Group	2.00%	25.20%	3.62%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Apple and Lenovo Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Apple	2	12	17	2	2.58
Lenovo Group	0	0	0	0	0.00

Apple currently has a consensus target price of $234.95, indicating a potential upside of 10.12%. Given Apple’s stronger consensus rating and higher possible upside, research analysts plainly believe Apple is more favorable than Lenovo Group.

Insider & Institutional Ownership

67.7% of Apple shares are owned by institutional investors. Comparatively, 0.1% of Lenovo Group shares are owned by institutional investors. 0.1% of Apple shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Apple pays an annual dividend of $1.04 per share and has a dividend yield of 0.5%. Lenovo Group pays an annual dividend of $0.40 per share and has a dividend yield of 1.6%. Apple pays out 16.2% of its earnings in the form of a dividend. Lenovo Group pays out 18.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Apple has increased its dividend for 14 consecutive years.

Summary

Apple beats Lenovo Group on 17 of the 18 factors compared between the two stocks.

About Apple

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi-purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, and HomePod. It also provides AppleCare support and cloud services; and operates various platforms, including the App Store that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts. In addition, the company offers various services, such as Apple Arcade, a game subscription service; Apple Fitness+, a personalized fitness service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It distributes third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was founded in 1976 and is headquartered in Cupertino, California.

About Lenovo Group

Lenovo Group Limited, an investment holding company, develops, manufactures, and markets technology products and services. It operates through Intelligent Devices Group, Infrastructure Solutions Group, and Solutions and Services Group segments. The company offers commercial and consumer personal computers, as well as servers and workstations; and a family of mobile Internet devices, including tablets and smartphones. In addition, it provides laptops, monitors, accessories, smart home and collaboration solutions, augmented and virtual reality, commercial internet of things, and smart infrastructure data center solutions. Further, the company manufactures and distributes IT products, computers, computer hardware, and peripheral equipment; and offers IT, business planning, management, supply chain, finance, administration support, procurement agency, data management, intellectual property, and investment management services. Additionally, it is involved in the retail and service business for consumer electronic products and related digital services; development, ownership, licensing, and sale of communications hardware and software; and develops software and applications. Furthermore, the company distributes smartphone, tablet, server, and storage. It operates in China, the Asia Pacific, Europe, the Middle East, Africa, and the Americas. Lenovo Group Limited was founded in 1984 and is headquartered in Quarry Bay, Hong Kong.