Who is your pick in the Super Bowl of stocks?

The Seattle Seahawks will attempt to defend their crown against the New England Patriots in Super Bowl XLIX. At most sports books, the Seahawks opened as favorites. However, due to demand by bettors, the Patriots have since swung to become 1-point favorites. Needless to say, at least on paper, it is a very even matchup.

This got us thinking…if this were the Super Bowl of stocks, then which two teams would be represented in the big game? We came up with Apple Inc. (AAPL) vs. ExxonMobil (XOM).

Apple is similar to the Seattle Seahawks in many ways. The first is that they are the current defending champion. Apple overtook ExxonMobil in total market capitalization back in 2014. Apple currently has a market cap of $682 billion (yes, that is two-thirds of a trillion dollars!) compared to ExxonMobil, which has fallen rapidly into second place at a $370 billion market cap.

This is an amazing turnaround considering that Apple was on the brink of bankruptcy less than 20 years ago. Microsoft stepped in and gave Apple a $150 million dollar life line back in 1997 that essentially saved the company from pending doom. Incredibly, in the very same year, the Seahawks were purchased by Microsoft co-founder Paul Allen. Maybe he should have purchased Apple instead of the Seahawks. Nevertheless, the Seahawks have gone from the NFL laughing stock to one of the most popular teams in the country. There is a joke that says, “What is the difference between the iPhone and a Seahawks fan? The iPhone has been around longer than 2012.”

On the other side of the playing field, ExxonMobil has a longer track record of proven success – similar to the New England Patriots. They have a Hall of Fame coach and quarterback, but seem to work in the midst of controversy. Some would argue that Oil companies work in gray areas similar to deflated balls and hidden video taping of opponents. ExxonMobil (just like the Patriots) hasn’t had the same type of success in recent years that they had when commodity markets were booming, but they certainly have experience on their side!

The tale of the tape:

Apple Inc:

Market Cap: $682 Billion

Trailing P/E: 15.9

Forward P/E: 12.9

Expected 5-Year Growth Rate: 12.7%

Price/Sales: 3.5

Price/Book: 5.6

Revenue (TTM): $199.8 Billion

Gross Profit (TTM): $70.5 Billion

Operating Cash Flow (TTM): $70.7 Billion

Dividend Yield: 1.6%

ExxonMobil:

Market Cap: $370 billion

Trailing P/E: 11.0

Forward P/E: 20.4

Expected 5-Year Growth Rate:  -1.9%

Price/Sales: 0.94

Price/Book: 2.1

Revenue (TTM): $392.8 Billion

Gross Profit (TTM): $136.1 Billion

Operating Cash Flow (TTM): $47.9 Billion

Dividend Yield: 3.1%

Based on the numbers, Apple (AAPL) is trading expensively compared to ExxonMobil (XOM) by most fundamental metrics. However, the earnings/revenue growth projections are clearly in Apple’s favor! The earnings are projected to grow by 12.7% annually, compared to an expected -1.9% growth in earnings for ExxonMobil (XOM) over the next 5 years.

The market is suggesting that they are willing to pay a premium for Apple due to earnings growth expectations. Both investments have additional risks.

The market is suggesting that ExxonMobil has become too old and stale. They seem to be concerned about the Oil industry overall. The expectations are low for this long time performer.

Meanwhile, Apple (AAPL) investors believe that this company’s future remains bright. They are not trading expensively at all if they can maintain the targeted 12.7% growth annually. However, when you are bringing in $199 billion in revenues annually, you need to sell a lot of product just to stay even, let alone squeeze out an additional $25 billion in revenues to keep up with the expected 12.7% annualized growth.

So, which team and company win the Super Bowl of stocks? The question ultimately comes down to whether or not you trust that the growth that we have seen in Russell Wilson, Richard Sherman and Apple Inc. can be maintained. They are relative newcomers when compared to the experience of Bill Belichick, Tom Brady and ExxonMobil!  

While the long-term growth prospects for Apple and the Seahawks are much stronger than the once great ExxonMobil and Patriots, there is a saying that “defense wins championships!”

In the stock world, the more defensive company seems to be ExxonMobil at 11x earnings and yielding 3.1% in annual dividends. ExxonMobil has been in the process of transitioning to more of a Natural Gas company and away from oil over the past few years. The price drop in oil may be a long-term positive given that the competition will become smaller as others fail to survive in a lower oil price environment. This should create an opportunity for ExxonMobil to recover even stronger than before in the years ahead.

Therefore, we will play it safe and go with the defensive choice. ExxonMobil is our pick for the better stock to invest in today!

Oh, and for football, our final score prediction: Patriots 24 / Seahawks 21!