Analyzing Cray (CRAY) & Apple (AAPL)

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

Analyst Ratings

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This is a breakdown of current ratings and recommmendations for Cray and Apple, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cray 0 0 5 0 3.00
Apple 1 15 30 1 2.66

Cray currently has a consensus price target of $27.20, suggesting a potential upside of 17.44%. Apple has a consensus price target of $203.95, suggesting a potential upside of 14.28%. Given Cray’s stronger consensus rating and higher probable upside, equities analysts plainly believe Cray is more favorable than Apple.

Volatility & Risk

Cray has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500. Comparatively, Apple has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Earnings and Valuation

This table compares Cray and Apple’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cray $392.51 million 2.39 -$133.82 million ($1.01) -22.93
Apple $229.23 billion 3.95 $48.35 billion $9.21 19.38

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cray -34.10% -8.51% -6.11%
Apple 21.13% 37.37% 13.82%

Dividends

Apple pays an annual dividend of $2.52 per share and has a dividend yield of 1.4%. Cray does not pay a dividend. Apple pays out 27.4% of its earnings in the form of a dividend. Apple has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

97.3% of Cray shares are held by institutional investors. Comparatively, 61.4% of Apple shares are held by institutional investors. 4.0% of Cray shares are held by insiders. Comparatively, 0.1% of Apple shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Apple beats Cray on 12 of the 18 factors compared between the two stocks.

About Cray

Cray Inc., together with its subsidiaries, designs, develops, manufactures, markets, and services computing systems, and data analytics and artificial intelligence solutions. It operates through Supercomputing, Storage and Data Management, Maintenance and Support, and Engineering Services and Other segments. The company offers a range of Cray XC series supercomputers, including Cray XC40, Cray XC50, and Cray XC50-AC; Cray CS series supercomputers comprises Cray CS500 and Cray CS-Storm; and analytics products, such as Cray Urika-GX platform used for production-class big data analytics workloads. It also provides storage and data management products comprising cray clusterstor storage systems that embeds the Lustre parallel file system and other software in an optimal configuration; and Cray DataWarp applications accelerator, a DataWarp technology that addresses a problem experienced by supercomputing customers. In addition, the company offers custom engineering solutions; and customer support services consisting of hardware and software maintenance, applications support, installation project management, system installation and de-installation, site preparation, and technical training for its systems, as well as ancillary services in application consulting, third-party software support, site engineering, on-site analysts for defined projects, and specialized training. Cray Inc. sells its products through direct sales force and a partner network of global and regional resellers. It serves clients ranging from government agencies or funded research laboratories, academic institutions, and commercial entities in North America, South America, Asia, Europe, the Middle East, Australia, and Africa. The company was formerly known as Tera Computer Company and changed its name to Cray Inc. in 2000. Cray Inc. was founded in 1987 and is headquartered in Seattle, Washington.

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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