Fusion-IO (NYSE: FIO) and Apple (NASDAQ:AAPL) are both technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, earnings, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Dividends

Apple pays an annual dividend of $2.52 per share and has a dividend yield of 1.5%. Fusion-IO does not pay a dividend. Apple pays out 28.6% of its earnings in the form of a dividend. Apple has increased its dividend for 4 consecutive years.

Profitability

This table compares Fusion-IO and Apple’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fusion-IO -30.49% -26.35% -20.81%
Apple 20.87% 35.40% 14.00%

Earnings & Valuation

This table compares Fusion-IO and Apple’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Fusion-IO N/A N/A N/A N/A N/A
Apple $223.51 billion 3.91 $70.21 billion $8.80 19.21

Apple has higher revenue and earnings than Fusion-IO.

Analyst Recommendations

This is a summary of recent ratings and price targets for Fusion-IO and Apple, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fusion-IO 0 0 0 0 N/A
Apple 0 7 41 0 2.85

Apple has a consensus price target of $194.33, indicating a potential upside of 14.96%. Given Apple’s higher possible upside, analysts clearly believe Apple is more favorable than Fusion-IO.

Institutional and Insider Ownership

60.3% of Apple shares are owned by institutional investors. 0.1% of Apple shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Apple beats Fusion-IO on 10 of the 11 factors compared between the two stocks.

About Fusion-IO

Fusion-io, Inc. provides solutions for enterprises, hyperscale datacenters, and small to medium enterprises (SMEs), that accelerates databases, virtualization, mission-critical applications, cloud computing, big data, and information systems. Its hardware and software platforms and solutions enable the acceleration of data and applications. It sells its solutions through a global direct sales force, original equipment manufacturers. The Company’s portfolio of storage memory products packages ioMemory hardware combined with its VSL software into a family of products suitable for direct, shared, and cached acceleration environments. Direct acceleration is provided by its ioDrive, ioScale, and ioFX enterprise grade PCIe-products that leverage flash and are placed in x86 servers or workstations to directly accelerate locally hosted applications. Its shared acceleration is provided by its ION Data Accelerator or ioControl software combined with ioMemory, VSL, and industry-standard servers.

About Apple

Apple Inc. (Apple) designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications. The Company’s products and services include iPhone, iPad, Mac, iPod, Apple TV, a portfolio of consumer and professional software applications, the iOS and OS X operating systems, iCloud, and a variety of accessory, service and support offerings. The Company also delivers digital content and applications through the iTunes Store, App StoreSM, iBookstoreSM, and Mac App Store. The Company distributes its products worldwide through its retail stores, online stores, and direct sales force, as well as through third-party cellular network carriers, wholesalers, retailers, and value-added resellers. In February 2012, the Company acquired app-search engine Chomp.

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