Head to Head Comparison: International Business Machines (IBM) & Its Rivals

International Business Machines (NYSE:IBM) is one of 271 publicly-traded companies in the “IT Services” industry, but how does it weigh in compared to its peers? We will compare International Business Machines to related businesses based on the strength of its dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.

Dividends

International Business Machines pays an annual dividend of $6.76 per share and has a dividend yield of 2.7%. International Business Machines pays out 57.6% of its earnings in the form of a dividend. As a group, “IT Services” companies pay a dividend yield of 2.3% and pay out 71.0% of their earnings in the form of a dividend. International Business Machines has increased its dividend for 30 consecutive years. International Business Machines is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Volatility & Risk

International Business Machines has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, International Business Machines’ peers have a beta of 2.16, indicating that their average stock price is 116% more volatile than the S&P 500.

Earnings and Valuation

This table compares International Business Machines and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
International Business Machines	$67.53 billion	$10.59 billion	21.00
International Business Machines Competitors	$3.24 billion	$227.67 million	-26.87

International Business Machines has higher revenue and earnings than its peers. International Business Machines is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a summary of recent ratings and target prices for International Business Machines and its peers, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Business Machines	2	13	19	0	2.50
International Business Machines Competitors	1992	5656	9478	342	2.47

International Business Machines currently has a consensus target price of $266.88, suggesting a potential upside of 8.35%. As a group, “IT Services” companies have a potential upside of 29.45%. Given International Business Machines’ peers higher possible upside, analysts clearly believe International Business Machines has less favorable growth aspects than its peers.

Profitability

This table compares International Business Machines and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
International Business Machines	15.99%	34.37%	7.63%
International Business Machines Competitors	-191.32%	-32.18%	-8.63%

Institutional & Insider Ownership

59.0% of International Business Machines shares are held by institutional investors. Comparatively, 36.4% of shares of all “IT Services” companies are held by institutional investors. 0.3% of International Business Machines shares are held by insiders. Comparatively, 20.4% of shares of all “IT Services” companies are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

International Business Machines beats its peers on 11 of the 15 factors compared.

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.