Despite its high stock price, Google (NASDAQ:GOOG) is still a likely candidate for substantial capital appreciation in the medium to long term. Current shareholders should hold long term, while interested investors should consider a buy soon as Google's stock price continues to increase. Also, consider rivals for a short sell or short squeeze, as well as new partners or potential acquisitions for lower share prices. Google significantly expanded its portfolio with the Motorola Mobility acquisition while bolstering its position in various markets through other recent key acquisitions. Google is developing innovative products like Google Glass, while developing its own mobile phones and designs for bringing high-speed fiber optic Internet to cities across the U.S. Alongside recent acquisitions, Google+ and Android OS will serve as strong proponents for sustaining long-term growth.
Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) are direct competition in terms of ecosystems for consumers and enterprises encompassing an OS, applications, office suites, and mobile products. Facebook (NASDAQ:FB) is Google's main competition in the social networking platform sector. Intel (NASDAQ:INTC) is worth considering as Google's Motorola Mobility recently chose Intel's Medfield chip to power its new Razr i smartphone. Both Google and Apple are currently around $700 per share; Google's market cap is around $234 billion while Apple's is around $657 billion. Microsoft is around $31 per share while both Facebook and Intel are under $25 per share. Google's price is around 21 times earnings; Apple and Microsoft are around 16 times earnings, Intel is around 9 times earnings, and Facebook is around 121 times earnings. Google's price-to-book ratio is 3.6 and Microsoft's is around 3.9, while Apple's is around 5.9.
Google's price-to-sales ratio is around 5.4 while Facebook's is around 10.8 and Intel's is around 2.1. Apple's $42 EPS is the highest and Google's $33 EPS is next, with Intel's EPS around $2.36, Microsoft's around $2.00, and Facebook's around $0.18. Apple's five-year sales growth is around 41%, while Google's is around 29% and Microsoft's is around 7.6%. Google year-over-year sales growth in the past quarter was 33%, while Facebook's was 32%, and Apple's was 22.5%. Google's current ratio is 3.84 while its debt-to-equity ratio is 0.10' Microsoft's current ratio is 2.6 and its debt-to-equity ratio is around 0.18. Google's return on equity is 19%, its operating margin is 30%, and its net margin is around 25%. Apple's return on equity is 44%, its operating margin is 35%, and its net margin is around 27%. Microsoft's return on equity is 27%, its operating margin is 29%, and its net margin is around 23%.
All of these firms have beta scores very close to one. Google has a low average daily volume of 2.2 million shares, and Apple is around 14 million while Facebook, Intel, and Microsoft all exceed 35 million shares. Google doesn't offer a dividend yet, Microsoft's is around $2.00 annually, and Intel's is $3.86. Google's stock has increased 6% within the last month and 11% year to date through later September. Facebook's price decreased 42% year to date, while Intel's decreased 11% in the last month. Apple's stock increased 74% year to date and 8% in the last month. Google recently increased beyond its 52-week high -- the stock has increased by around 15.2% since its last earnings release.
Google's recent earnings release reported second-quarter total revenue as $12.2 billion, increasing from $9.02 billion year over year. In the first half, Google totaled $22.8 billion. Second-quarter net income totaled $2.78 billion and $5.67 billion in the first half. Cash on hand at the first half increased to $15.4 billion from $10.3 billion year over year. Second-quarter operating income increased to $3.2 billion from $2.8 billion year over year. The U.S. accounts for 46% of total revenues. The May 2012 acquisition of Motorola Mobility adds two new segments to Google: Home and Mobile.
The Google segment still consists of mainly AdWords and AdSense; the Mobile segment focuses on wireless devices and services; and the Home segment focuses on video entertainment and digital TV services. The Google segment accounted for 90% of revenue in the second quarter. Net income was 22% of revenue, while cost of revenue was 36% of the Google segment and 82% of the Motorola hardware segment. Traffic acquisition costs accounted for 24% of Google's advertising revenue.
Motorola Mobility recently unveiled the Razr i, its first phone to be powered by the Intel Medfield chip. The Razr m is 4G capable and designated for the U.S., while the Razr i is limited to 3G and will be designated for markets outside the U.S. The smartphone is comparable to the iPhone 4S and may serve as a precursor to an ongoing relationship with Intel for future Google Motorola Mobility devices.
Google is also working toward deploying fiber-optic networks in Kansas City, Mo., that will transfer data up to speeds of 1 GB/sec for $70 per month; the speed currently provided by local cable companies maxes out at 50 MB/sec. Google is also developing the next innovative tech trend: wearable smart devices. Google Glass eyewear should be available toward the end of 2013. Google Play and YouTube will also be taking on 600 shows from FOX in order to improve its portfolio and expand its services.
Google recently acquired Nik Software in order to help Google+ compete with Facebook's recent acquisition of Instagram. Nik Software will bring many of the same advanced photo editing options that Instagram offers to millions of Internet users. Instagram has over 100 million users while Snapseed, Nik Software's mobile app, has around 9 million users. This new addition can gain substantial momentum once it is featured on Android OS, the most popular mobile OS worldwide.
According to research analyst Trip Chowdhry, Android OS was receiving 350,000 activations per day in April 2011; by August 2012, Android OS was receiving 1.2 million activations per day. Google maintains its relationship with Samsung and other device manufacturers, but it is not far from directly competing with Apple if it does start to use Motorola Mobility to exclusively roll out its own brand of mobile phones. Google has a hand in just about everything these days, and it seems to have a clear plan for prosperity online and offline now as well.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.