Should you take a bite of Apple stock? Maybe

— -- A: For investors, the important debate isn't whether you're a Mac or a PC. The question is whether you should buy stock in Apple or not.

Apple is one of those extremely difficult stocks to analyze. The company has a history of reinventing itself every few years, making historical trend analysis not all that reliable.

Additionally, the company's skill at marketing and advertising allows it to get premium pricing for many of its products, which helps its profitability, but that's difficult to forecast.

Getting consumers excited about its products is something Apple is good at. But should investors get excited about its stock? To find out, let's put the stock through the four steps we rely on at Ask Matt:

Step 1: Risk vs. reward. When you take a risk on a stock, you want to make sure you're properly rewarded. Downloading Apple's trading history back to 1980, we see the company generated an average annual compound rate of price appreciation of 12.6%. This is relatively high; the S&P 500 posted a 10.1% annual return in the same time frame, says IFA.com.

But here's the rub. If you owned Apple, you accepted higher risk— standard deviation— of 75.5 percentage points. That's much higher than the 15.5 percentage point risk of the S&P 500 during the period. So to get a 24.8% higher return you accepted 387% higher risk. That's not a great tradeoff and should stop many investors right there.

Step 2: Measure the stock's discounted cash flow. Some investors decide if a stock is pricey by comparing its current price to the present value of its expected cash flows. It's a complicated analysis made simple with a system from NewConstructs. When I run Apple's stock, I find it's rated "neutral." In other words, the stock is neither cheap or expensive relative to the cash the company is expected to generate over its lifetime.