Alphabet vs IBM

Alphabet Inc. and IBM are two tech giants that have been dominating the stock market for years. Alphabet, the parent company of Google, is known for its innovative technology and strong financial performance. On the other hand, IBM has a long-standing reputation for its expertise in information technology services and software. Both companies have their own strengths and weaknesses, making it an interesting comparison for investors looking to diversify their portfolios. Let's delve deeper into the performance of Alphabet vs IBM stocks.

Alphabet or IBM?

When comparing Alphabet and IBM, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Alphabet and IBM.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Alphabet has a dividend yield of 0.36%, while IBM has a dividend yield of 2.86%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Alphabet reports a 5-year dividend growth of 0.00% year and a payout ratio of 2.81%. On the other hand, IBM reports a 5-year dividend growth of 1.32% year and a payout ratio of 72.25%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Alphabet P/E ratio at 23.30 and IBM's P/E ratio at 25.43. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Alphabet P/B ratio is 6.79 while IBM's P/B ratio is 8.92.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Alphabet has seen a 5-year revenue growth of 1.47%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Alphabet's ROE at 30.48% and IBM's ROE at 36.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $166.05 for Alphabet and $232.71 for IBM. Over the past year, Alphabet's prices ranged from $121.46 to $193.31, with a yearly change of 59.16%. IBM's prices fluctuated between $135.87 and $237.35, with a yearly change of 74.69%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.