Facebook Stock Vs Google Stock! Which Stock Is A Better Buy?
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Today we have a stock market battle between two tech giants! One being Facebook stock and the other being Google stock. Both these companies have multiple businesses worth 100 billion-plus and they both have exciting things going on outside of the main stuff.
Google has Waymo which could be huge in autonomous driving down the road while Facebook has their new Libra coin which is a cryptocurrency about to take the game over. Both these stocks are amazing but if I have to pick 1… I am picking…
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Well good day subscribers Hope you guys are having a great day out there as always today we’re gonna have a little debate around two of the biggest tech companies in the entire world Google and Facebook and we’re going to discuss which of these stocks is actually a better buy here today is it Facebook stock or is a Google stock two absolute tech giants two companies that a ton of you guys either own or have thought about buying in which is actually a better buy.
That’s what we’re going to discuss in by the way, let me know if you guys enjoy this by hitting that thumbs up button. If I get a lot of thumbs up on this video, I can do more of these type of videos in the future where we kind of look in depth at two different companies in discus like which one’s an actual better buy.
So let me know because I always look at like view counts. And I always look at how many thumbs up videos get to the side future video. So if you enjoy this, you want this to become something we do more often then make sure you hit that thumbs up button guys. So hope you enjoy this as always.
So before we get into the valuations, I’m gonna take you through a bunch of things on my iPad, we’re look a bunch of different valuation metrics and whatnot. Before we get to that stage, it’s always important to kind of like understand business models before you even worry about valuations or anything like that.
Okay, so these tos businesses are absolutely massive. They have so many things going on. It’s ridiculous. Okay, so if you think about Facebook, that Facebook has many different businesses inside the company, okay, obviously, they have the Facebook platform, which is by far and away the biggest social media network in the entire world, with well over 2 billion people using it each and every month.
Okay, absolutely massive. They got the Facebook platform, they have Instagram, which has just taken off as far as growth over the past few years. As far as like pop culture, that’s the most relevant social media out there. And that’s really the hottest social media out there. They have Well, you know, well over a billion people using Instagram.
And I wouldn’t be surprised if Instagram long term actually becomes bigger than Facebook. Okay. They have WhatsApp, which is a messaging app, one of the biggest in the world over a billion people use WhatsApp for messaging. They have Facebook Messenger, over a billion people use Facebook Messenger for messaging friends and family around the world as well as messaging with other businesses.
Okay, something to keep in mind. They are Oculus, which is one of the biggest players in virtual reality in Oculus actually has a very exciting product that has just come out recently around virtual reality. So if you’re kind of thinking about who’s going to be one of the biggest players in virtual reality, long term, Oculus is definitely setting up to be one of the biggest players as far as virtual reality goes in future years.
All right, they have Instagram shopping, and they have the Facebook marketplace. And they definitely have a lot of ambition to continue to expand their business into e commerce, which really over time could put them more and more directly in competition with actually Amazon because they have a lot of ambitions around the commerce platform.
And they’re kind of being very sneaky about it very under the radar. How were they really want to go ecommerce wise, because I don’t really think they want to show up on Amazon’s radar as much as some people might think. Although I can guarantee you Jeff Bezos, he has them on the radar, okay, then they have their new Libra crypto, which is going to be coming out, which is an absolutely possibly huge thing.
This is something that could fundamentally change the currency system in a way that we haven’t seen the currency system changed in a long, long time. They have so many partners already with them on this project in so many more coming in Facebook has such unbelievable scale, and they’re so successful. And when they go after something, they do it right and they do it successfully.
That this is really a such a big opportunity that this might be the biggest opportunity any company in the world is going after right now. And that speaks volumes because many of my stocks have some huge opportunities they’re going after I can’t really think of anything, that is a bigger opportunity than the LIBOR crypto because that could literally be something that fundamentally changes the currency system forever.
Okay, so we’re gonna have to see how that shakes out. I’m not getting too hyped on it. When I just think about the Facebook scale. When I think about how many partners already have signed up for this, I’m thinking this is gonna be possibly very, very huge, okay. They also have Instagram TV, which got off to a very slow start when it came out last year, but I gotta say Instagram TV.
I’m looking at like my own habits. I’m like watching Instagram TV more and more often. And I can almost guarantee you most folks are starting to watch Instagram TV a lot more than they previously thought were like when it first came out was like, who cares about Instagram TV? No, it’s starting to get woven into the fabric more and more.
And this is what Facebook does. They just they just find ways to be successful. Like, oh, people aren’t watching over here that well, let’s put a tab over here. Maybe people will watch it a little more. Oh, let’s do this. Let’s do that very intelligent that company is you don’t get to this type of scale without being very smart and making things work.
Okay. And then Facebook has many other businesses, but I just wanted to kind of, you know, put up the main ones. Okay. These companies are so big. It’s hard to get your mind around them. Ok. Google. Ok. Google McDougal. Obviously, they have the Google search product, which I mean, if you’re human, you probably use Google search on like an everyday basis.
I use Google Search probably several times per day and that’s pretty much day in and day out. I’ll use it on my computer. I’ll use it on my iPad. I’ll use it on my phone like Google Search like like Who doesn’t use Google search out there? Okay, they have YouTube, which is pretty much in my opinion, by far and away the most important video platform in the world.
And I’m not just talking about online, I’m just talking about the importance of YouTube. I can’t really think of many things in the world that are more important than YouTube. Like if YouTube went down tomorrow, like the world would like freak out, like I don’t even know what would happen if like YouTube, the platform like you went to log on, and like it didn’t work for the whole day, like holy smokes, like people would be like.
What do I do in my life, like YouTube’s insanely big and so many people watch it for either educational content, or they might watch it for obviously, entertainment content, or they might watch out for tutorials is so many things like if something went wrong with I don’t know, your refrigerator, like sometimes in the first place, like people think is like, oh, what went wrong with my.
Whirlpool refrigerator, and they’ll type in the model number, and they’ll be like, this is having this issue. And they’ll go to YouTube to see if anybody’s posted YouTube videos about Okay, YouTube’s just a Goliath beast, okay, it’s a business that if it was a standalone business, in my opinion, to be worth at least at least 100 plus billion dollars, if not 200 plus billion dollars.
If it was its own standalone company, okay. They have Google Cloud, which is huge when it comes to the enterprise. And not just the enterprise. But also they have a big business as far as like consumers using Google Cloud. Like, when I had my small real estate marketing business, I use the Google Cloud as one as my cloud providers along with Dropbox.
Okay, hardware devices, they have a ton of different, you know, pixel phones out there. Now, they have speakers, they have headphones, they’re just trying to get bigger and bigger into hardware devices, they obviously have products that you can plug into your TV and whatnot. So hardware devices, big business for them.
Way mo way, Mo obviously the ride sharing service that is hopefully going to be come autonomous in the future that has a massive opportunity in front of it. Okay, kind of what Libra is for Facebook, I mean, as far as we know, even if they were the number one most successful, let’s say Libra works out and way mo works out.
Libra will probably still be much bigger Wei Mo’s a massive opportunity that we’re talking about if they could become the dominant player, when it comes to like self driving, like autonomous driving, like ride sharing those sorts of things. Like that’s a massive, massive opportunity. But there’s a lot of competition, that’s a something to think about.
Okay, they obviously have Android, which is the most popular service. By far, when it comes to smartphones, you have iOS, or you have Android and androids far bigger than iOS, because pretty much almost every single phone manufacturer uses Android, okay, they have YouTube TV, which is becoming more and more popular, which is their TV service, which is really competing gets the satellite companies.
The cable companies and things like that. And then they have a bunch of other businesses, once again, these businesses are huge. But at the end of the day, at the end of the day, both these business models, you know, even with all the different things they have going on the end of the day, most of their revenues.
Most of their profits come from advertiser spending on their products on Facebook side of the Facebook platform, Instagram platform, and on google google search and the platform, you’re watching us on YouTube, most of the far majority of their revenues, and profits are still coming from those businesses.
So even as you know, Google tries to diversify their business model, Facebook tries to diversify your business model. Still, at the end of the day, it’s advertising money. That was what these companies make. Okay, now let’s start getting into some valuation things now that you guys can hopefully understand the business model.
So are getting into some valuation. And it should get interesting already, guys. So what we’re looking at here is we’re looking at a split screen of Facebook and alphabet stock, a good old Google McDougal. Now, if you guys have an iPad, I highly suggest you do this. If you’re ever comparing two companies.
I do this all the time with my iPad, whenever let’s say there’s two companies, I’m like, which one should I really invest in? Because I always want my money in kind of the best stocks possible. So I’ll compare side by side the stocks in a very easy manner, just, you know, split screen it and you can kind of start looking up some statistics around the stocks.
Okay. So first off, you know, although a lot of people look at these companies as equals, they’re not really equals look at the market cap of Facebook, look at the market cap of Google, okay, Google’s $230 billion bigger as far as market cap. And to give you some reference, there are only a handful of companies in the world that are worth more than $230 billion dollars.
Like that’s a ridiculous number. Okay? Although people are gonna like look at these, like, Google’s just as big as Facebook or Facebook is just as big as Google. Now, look at the market cap like huge, huge difference in size. Okay, now next up, if we look at the trailing P and forward p we’re gonna see some eerily similar numbers.
Okay, look at that Facebook trailing p around 28. And oh my gosh, Google trailing p around 28. Four p on Facebook around 20. Forward p on Google around 20. That’s crazy, guys. That’s just absolutely crazy that literally, the trailing peas and four peas are literally almost exact, like unbelievable. Okay, next thing.
I want to look at is the price to sales ratio. Okay, in terms of Facebook 9.18 price to sales ratio in terms of Google 5.4 for price to sales ratios essentially means you know, Facebook is just more profitable, though able to turn more and more money to net income than what Google is okay. And if we look at as far as like the 52 week high Facebook’s $30 off of their 52 week high, okay, and then the other side.
Google is about $170 away from their 52 week high. So needless to say both of these stocks are quite a bit away from their 52 week high. It’s not like they’re just you know, slamming up against it. They’re quite a ways away. Okay, now let’s go ahead and look at some balance sheet numbers. In terms of balance sheet, I’ll say Google has probably the the best balance sheet in literally the world.
Okay, best balance sheet in the world. In my opinion, Facebook has top five best balance sheet in the entire world. So needless to say, between these two companies, it’s like splitting hairs. But Facebook has about $45 billion in cash sitting around, while Google on the other hand, has about $113 billion in cash sitting around of Facebook’s $189 stock price, about $16. And just under $16 of that is cash just sitting around, right.
And then in terms of Google, about $163 of cash per share. And remember, they have about 11 $100 share price. So needless to say, over 10% of the value of Google stock is basically just in cash. Like that’s insane. Okay, as far as operating cash flow, little over 30 billion just under 31 billion for Facebook, and for Google about 48 billion in operating cash flow. Okay, so far so fa.
If I had to share my thoughts so far, I would say Google is a head as a right now, okay, if we’re just kind of judging off of what we’ve been judging off of, I would say Google might be slightly ahead from what would be a better deal standpoint. But there’s some very key things we got to look at.
Now that kind of flips the script, Okay, first thing we kind of take a look at here is once again, these companies don’t have any dividends, okay, they neither one pays out dividends, they use most of their money just to cash stack or to buy other companies or to fund future growth, okay. But I got some numbers circled in red there.
And these are very key numbers, quarterly revenue growth year over year came in at 26%, for Facebook in the last quarter, while on the other hand, Google McDougal came in just over 16%, which means there’s a massive, massive growth difference between where Facebook is at and where Google’s at a 26% and a 16%, are massively apart, okay, they really can’t even be compared.
So Facebook is just growing Far, far faster than Google is right now. Okay. And if we look at as far as growth expectations over the next year, so we’re gonna see once again, Facebook as well outgrowing Google. So in terms of the current year, Facebook’s expect to grow over 24%. And I wouldn’t be surprised if they smash that number, actually, in terms of next year, they’re expected to grow over 21% while Google.
On the other hand, is expected to grow about 17 and a half percent in the current year. And keep in mind, they did not grow that fast in the last quarter. And then as far as next year goes, they’re expected to about 16.6% revenue growth there. Okay. So if we look at those numbers there guys on the income statement, what’s kind of being reported and what’s expected over the next year.
So we can see, there’s a clear difference in growth between Facebook and Google and Facebook’s just a company that is growing far faster, and therefore it makes it a lot more attractive stock than Google. because keep in mind, the valuations are very similar in terms of the P e ratios and whatnot. But Facebook is just a company that’s growing at a much, much steeper rate.
Okay. And then one more thing to factor. Okay. When I look at both these companies, I think they both have an opportunity of $100 billion plus, meaning they’re going after an opportunity that can grow the company by at least $100 billion plus, okay, they obviously have their main businesses wet will should continue to grow for years and years, make the companies much larger.
But if I think about a brand new opportunity, that’s basically bringing them nothing right now, but is 100 billion to $200 billion type opportunity to bring them in more market cap and five years from now, or 10 years from now. They’re both that have that opportunity. Okay, there’s the Libra, which is Facebook’s new crypto product, which once again, could literally change the currency system.
Now they’re going to act as a third party. So if you’re thinking like, they’re going to announce this Libra, and they hope it goes up in value, so that they can sell it to somebody, they don’t do that. Okay, the reason they kind of want the lever product out there is so they can go ahead and make more money on advertising, all those sorts of things over time, and hopefully.
Maybe even make their commerce platforms very easy to use, which maybe puts them even more directly in competition with Amazon and maybe even Alibaba around the world. Okay. So they’re actually going after much bigger opportunities. And I think a lot of people realize, and obviously, in Google’s case, they have the waymo product, right?
Which if they could win the autonomous taxi market, that could be a market worth 100 billion plus dollars, okay, so they kind of got to think about two things like like, which of these two could be bigger? And then which has more competitors? Okay, let’s start with the competitors. If you’re looking at Facebook and the.
Libra currency, do they really have any real competitor? And the answer is no, there’s not one real competitor to Libra currency in the entire world. There’s no other company that’s like, you know, kind of, like compete in this space. It’s like them and they’re going to like play their own race. And this is unbelievable, because maybe Facebook’s the only company in the world that could pull something like this off. Okay.
And then if we think about Wei, Mo, right, you know, look at that way mo there, you think about Wei mo they’re gonna have a lot of competitors, right? They’re gonna have Uber Uber is gonna want to win that market, right to stay in business lifts gonna want to win that market to stay in business. Tesla’s gonna want to win that market.
We know Tesla’s got probably the most ambition in that space as Gen Y. They might actually be in the forefront. We have cruise automation, there are a ton of companies that are going to be direct competitors to Weibo, which is going to make it very interesting to see Kind of like who wins that market over time. If you look at Facebook’s product.
I think Facebook’s product could actually be a lot bigger in terms of what it means from a profit standpoint and revenue standpoint, for Facebook long term versus what Wei mo can mean. Because once again, if Wei mo wins, they’re going to have to beat out a massive amount of competitors. If LIBOR wins, then just means Facebook like executed really well.
Facebook has no competitors in this. And that’s pretty unbelievable, guys. So in my opinion, Facebook is a better investment. But Google’s a great investment as well, when you’re kind of talking about two great companies like this, that are at pretty fair valuations. It’s like splitting hairs, right?
It’s like, you know, comparing one of the greatest athletes ever in basketball against another one of the greatest basketball players of all time, right? It’s like splitting hairs, because they’re so great. They do so many things very well.
And they consistently win that it’s so hard to like, you don’t compare them right, you’re splitting hairs in the end. And that’s what I kind of feel like I’m doing with Facebook and Google, they’re both such great companies. But if I hadn’t What if I had to pick one I’m picking Facebook.
I think that company just has more growth ahead of it. And you’re getting it for evaluation very similar to Google and I think they’re going to wait outgrow Google in future years. Although I love Google and I think Google’s actually a pretty good value here as well guy so anyways, I want to hear your opinion down there in that comment section make sure you smash that thumbs up button if you enjoy this series.
This is a series I can do more often but I got to see the thumbs up and I got to see the views for this video doesn’t get the views and this video doesn’t get enough thumbs up like we’re not going to do this series guys. So anyways, hope you enjoyed it. As always, thank you for watching and have a great day by weight becoming masters stock Mark course on sale sales and in tune, link in description. Peace.