Seagate Technology (NASDAQ:STX) and International Business Machines (NYSE:IBM) Head to Head Analysis

International Business Machines (NYSE:IBM) and Seagate Technology (NASDAQ:STX) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Profitability

This table compares International Business Machines and Seagate Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Business Machines	9.11%	37.62%	7.08%
Seagate Technology	16.15%	-169.60%	19.70%

Valuation and Earnings

This table compares International Business Machines and Seagate Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Business Machines	$62.75 billion	3.83	$6.02 billion	$6.16	42.03
Seagate Technology	$9.10 billion	4.99	$1.47 billion	$6.77	31.52

International Business Machines has higher revenue and earnings than Seagate Technology. Seagate Technology 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.

Institutional and Insider Ownership

59.0% of International Business Machines shares are owned by institutional investors. Comparatively, 92.9% of Seagate Technology shares are owned by institutional investors. 0.2% of International Business Machines shares are owned by insiders. Comparatively, 0.8% of Seagate Technology shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

International Business Machines pays an annual dividend of $6.72 per share and has a dividend yield of 2.6%. Seagate Technology pays an annual dividend of $2.88 per share and has a dividend yield of 1.3%. International Business Machines pays out 109.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Seagate Technology pays out 42.5% of its earnings in the form of a dividend. International Business Machines has raised its dividend for 30 consecutive years and Seagate Technology has raised its dividend for 1 consecutive years. International Business Machines is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings for International Business Machines and Seagate Technology, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Business Machines	1	9	7	1	2.44
Seagate Technology	1	5	15	0	2.67

International Business Machines presently has a consensus price target of $275.00, indicating a potential upside of 6.21%. Seagate Technology has a consensus price target of $170.05, indicating a potential downside of 20.30%. Given International Business Machines’ higher possible upside, analysts clearly believe International Business Machines is more favorable than Seagate Technology.

Volatility and Risk

International Business Machines has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500. Comparatively, Seagate Technology has a beta of 1.53, indicating that its share price is 53% more volatile than the S&P 500.

Summary

Seagate Technology beats International Business Machines on 10 of the 18 factors compared between the two stocks.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

About Seagate Technology

Seagate Technology Holdings plc provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally. It provides mass capacity storage products, including enterprise nearline hard disk drives (HDDs), enterprise nearline solid state drives (SSDs), enterprise nearline systems, video and image HDDs, and network-attached storage drives. The company also offers legacy applications comprising Mission Critical HDDs and SSDs; external storage solutions under the Seagate Ultra Touch, One Touch, and Expansion product lines, as well as under the LaCie brand name; desktop drives; notebook drives, DVR HDDs, and gaming SSDs. In addition, it provides Lyve edge-to-cloud mass capacity platform. The company sells its products primarily to OEMs, distributors, and retailers. Seagate Technology Holdings plc was founded in 1978 and is based in Dublin, Ireland.