AT&T vs IBM Which Performs Better?

AT&T and IBM are two major players in the telecommunications and technology industries, respectively. Both companies have a long history of innovation and success in their respective sectors. Investors looking to diversify their portfolios may consider investing in these two stocks, as they offer exposure to different segments of the market. AT&T's stock is known for its stability and reliable dividend payments, while IBM's stock is praised for its strong technological advances and global presence. It is important for investors to carefully analyze the financial health and growth prospects of both companies before making an investment decision.

AT&T or IBM?

When comparing AT&T 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 AT&T 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. AT&T has a dividend yield of 4.24%, while IBM has a dividend yield of 2.66%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AT&T reports a 5-year dividend growth of -11.46% year and a payout ratio of 74.97%. On the other hand, IBM reports a 5-year dividend growth of 0.74% year and a payout ratio of 102.04%.

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 AT&T P/E ratio at 17.22 and IBM's P/E ratio at 38.64. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AT&T P/B ratio is 1.59 while IBM's P/B ratio is 8.52.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AT&T has seen a 5-year revenue growth of -0.31%, while IBM's is 0.03%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AT&T's ROE at 10.17% and IBM's ROE at 24.33%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $25.83 for AT&T and $247.01 for IBM. Over the past year, AT&T's prices ranged from $15.94 to $27.97, with a yearly change of 75.47%. IBM's prices fluctuated between $162.62 and $265.72, with a yearly change of 63.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.