ASML vs IBM Which Outperforms?

ASML and IBM are two companies operating in the technology sector, with a focus on semiconductor manufacturing. ASML is a Dutch company that specializes in producing lithography machines used in the production of integrated circuits, while IBM is an American multinational technology company known for its advancements in computing and artificial intelligence. Both companies have seen fluctuations in their stock prices due to market demand, technological advancements, and global economic conditions. Investors interested in the semiconductor industry may consider evaluating the performance of ASML and IBM stocks to make informed investment decisions.

ASML or IBM?

When comparing ASML 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 ASML 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. ASML has a dividend yield of 0.89%, while IBM has a dividend yield of 2.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ASML reports a 5-year dividend growth of 29.40% year and a payout ratio of 35.02%. On the other hand, IBM reports a 5-year dividend growth of 1.32% year and a payout ratio of 95.65%.

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 ASML P/E ratio at 38.78 and IBM's P/E ratio at 33.21. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ASML P/B ratio is 16.63 while IBM's P/B ratio is 8.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ASML has seen a 5-year revenue growth of 1.71%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ASML's ROE at 47.68% and IBM's ROE at 27.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $716.22 for ASML and $230.26 for IBM. Over the past year, ASML's prices ranged from $645.45 to $1110.09, with a yearly change of 71.99%. IBM's prices fluctuated between $157.89 and $239.35, with a yearly change of 51.59%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.