Reviewing International Business Machines Corporation (IBM) and its Peers

International Business Machines Corporation (NYSE: IBM) is one of 197 public companies in the “IT Services & Consulting” industry, but how does it compare to its peers? We will compare International Business Machines Corporation to related companies based off the strength of its dividends, valuation, risk, institutional ownership, earnings, analyst recommendations and profitability.

Valuation & Earnings

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

Gross Revenue EBITDA Price/Earnings Ratio
International Business Machines Corporation $78.44 billion $17.19 billion 12.04
International Business Machines Corporation Competitors $2.11 billion $365.19 million 11.68

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

Profitability

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

Net Margins Return on Equity Return on Assets
International Business Machines Corporation 14.58% 71.53% 11.02%
International Business Machines Corporation Competitors -24.34% -65.51% -4.50%

Volatility and Risk

International Business Machines Corporation has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, International Business Machines Corporation’s peers have a beta of 1.26, indicating that their average stock price is 26% more volatile than the S&P 500.

Dividends

International Business Machines Corporation pays an annual dividend of $6.00 per share and has a dividend yield of 4.1%. International Business Machines Corporation pays out 49.9% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.7% and pay out 35.8% of their earnings in the form of a dividend. International Business Machines Corporation has raised its dividend for 17 consecutive years.

Analyst Ratings

This is a summary of recent ratings for International Business Machines Corporation and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
International Business Machines Corporation 6 14 7 0 2.04
International Business Machines Corporation Competitors 995 5098 7720 220 2.51

International Business Machines Corporation currently has a consensus price target of $157.63, suggesting a potential upside of 8.82%. All “IT Services & Consulting” companies have a potential upside of 2.57%. Given International Business Machines Corporation’s higher probable upside, equities research analysts clearly believe International Business Machines Corporation is more favorable than its peers.

Institutional and Insider Ownership

57.9% of International Business Machines Corporation shares are owned by institutional investors. Comparatively, 62.6% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 0.2% of International Business Machines Corporation shares are owned by company insiders. Comparatively, 16.2% of shares of all “IT Services & Consulting” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

International Business Machines Corporation beats its peers on 8 of the 15 factors compared.

About International Business Machines Corporation

International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.

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