Goldman Sachs vs IBM Which Is More Profitable?

Goldman Sachs and IBM are two well-known companies in the financial and technology sectors, respectively. Both stocks are highly valued in the market, but the companies operate in different industries and have unique business models. Goldman Sachs is a leading investment banking and financial services firm, while IBM is a multinational technology company specializing in hardware, software, and services. Investors often compare these two stocks for their growth potential, financial performance, and market trends to make informed investment decisions.

Goldman Sachs or IBM?

When comparing Goldman Sachs 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 Goldman Sachs 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. Goldman Sachs has a dividend yield of 1.96%, while IBM has a dividend yield of 2.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Goldman Sachs reports a 5-year dividend growth of 27.23% year and a payout ratio of 36.22%. 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 Goldman Sachs P/E ratio at 15.62 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. Goldman Sachs P/B ratio is 1.57 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, Goldman Sachs has seen a 5-year revenue growth of 0.57%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Goldman Sachs's ROE at 10.23% and IBM's ROE at 27.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $585.09 for Goldman Sachs and $230.26 for IBM. Over the past year, Goldman Sachs's prices ranged from $372.07 to $612.73, with a yearly change of 64.68%. 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.