Corning (NYSE:GLW) and International Business Machines (NYSE:IBM) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.
Analyst Ratings
This is a summary of recent ratings and price targets for Corning and International Business Machines, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Corning | 0 | 3 | 7 | 0 | 2.70 |
International Business Machines | 0 | 7 | 3 | 0 | 2.30 |
Corning currently has a consensus target price of $39.8889, indicating a potential downside of 12.91%. International Business Machines has a consensus target price of $142.10, indicating a potential upside of 6.37%. Given International Business Machines' higher probable upside, analysts plainly believe International Business Machines is more favorable than Corning.
Institutional and Insider Ownership
74.3% of Corning shares are owned by institutional investors. Comparatively, 55.7% of International Business Machines shares are owned by institutional investors. 0.5% of Corning shares are owned by company insiders. Comparatively, 0.2% of International Business Machines shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Profitability
This table compares Corning and International Business Machines' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Corning | 2.71% | 11.50% | 4.12% |
International Business Machines | 10.53% | 48.69% | 6.59% |
Risk and Volatility
Corning has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, International Business Machines has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500.
Valuation and Earnings
This table compares Corning and International Business Machines' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Corning | $11.50 billion | 3.06 | $960 million | $1.76 | 26.02 |
International Business Machines | $77.15 billion | 1.55 | $9.43 billion | $12.81 | 10.43 |
International Business Machines has higher revenue and earnings than Corning. International Business Machines is trading at a lower price-to-earnings ratio than Corning, indicating that it is currently the more affordable of the two stocks.
Dividends
Corning pays an annual dividend of $0.96 per share and has a dividend yield of 2.1%. International Business Machines pays an annual dividend of $6.52 per share and has a dividend yield of 4.9%. Corning pays out 54.5% of its earnings in the form of a dividend. International Business Machines pays out 50.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Corning has raised its dividend for 1 consecutive years and International Business Machines has raised its dividend for 21 consecutive years. International Business Machines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
International Business Machines beats Corning on 11 of the 17 factors compared between the two stocks.