IBM vs. CSCO, ANET, UBER, NOW, VZ, TXN, AMAT, MU, INTC, and INTU
Should you be buying International Business Machines stock or one of its competitors? The main competitors of International Business Machines include Cisco Systems (CSCO), Arista Networks (ANET), Uber Technologies (UBER), ServiceNow (NOW), Verizon Communications (VZ), Texas Instruments (TXN), Applied Materials (AMAT), Micron Technology (MU), Intel (INTC), and Intuit (INTU). These companies are all part of the "computer and technology" sector.
Cisco Systems (NASDAQ:CSCO) and International Business Machines (NYSE:IBM) are both large-cap computer and technology companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, valuation, earnings, analyst recommendations, risk, institutional ownership, community ranking, media sentiment and dividends.
Cisco Systems has higher earnings, but lower revenue than International Business Machines. Cisco Systems is trading at a lower price-to-earnings ratio than International Business Machines, indicating that it is currently the more affordable of the two stocks.
Cisco Systems has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.74, suggesting that its stock price is 26% less volatile than the S&P 500.
Cisco Systems currently has a consensus target price of $55.53, indicating a potential upside of 16.19%. International Business Machines has a consensus target price of $181.29, indicating a potential upside of 9.01%. Given International Business Machines' stronger consensus rating and higher possible upside, equities research analysts plainly believe Cisco Systems is more favorable than International Business Machines.
73.3% of Cisco Systems shares are held by institutional investors. Comparatively, 59.0% of International Business Machines shares are held by institutional investors. 0.0% of Cisco Systems shares are held by insiders. Comparatively, 0.1% of International Business Machines shares are held by 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.
Cisco Systems received 1305 more outperform votes than International Business Machines when rated by MarketBeat users. Likewise, 73.40% of users gave Cisco Systems an outperform vote while only 58.63% of users gave International Business Machines an outperform vote.
Cisco Systems has a net margin of 23.49% compared to Cisco Systems' net margin of 13.18%. Cisco Systems' return on equity of 40.21% beat International Business Machines' return on equity.
In the previous week, International Business Machines had 26 more articles in the media than Cisco Systems. MarketBeat recorded 51 mentions for International Business Machines and 25 mentions for Cisco Systems. International Business Machines' average media sentiment score of 0.49 beat Cisco Systems' score of 0.27 indicating that Cisco Systems is being referred to more favorably in the media.
Cisco Systems pays an annual dividend of $1.60 per share and has a dividend yield of 3.3%. International Business Machines pays an annual dividend of $6.68 per share and has a dividend yield of 4.0%. Cisco Systems pays out 48.6% of its earnings in the form of a dividend. International Business Machines pays out 75.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cisco Systems has increased its dividend for 13 consecutive years and International Business Machines has increased its dividend for 29 consecutive years. International Business Machines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Cisco Systems beats International Business Machines on 13 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding IBM and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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