HP vs IBM

HP (Hewlett Packard) and IBM are two well-known technology companies that have been competing in the market for decades. Both companies are giants in the tech industry and have a significant impact on the stock market. Investors are often torn between choosing to invest in HP or IBM stocks. This comparison will analyze various aspects of both companies, including financial performance, market share, innovation, and future outlook, to determine which stock may be a more promising investment option.

HP or IBM?

When comparing HP 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 HP 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. HP has a dividend yield of 3.73%, while IBM has a dividend yield of 2.86%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. HP reports a 5-year dividend growth of 12.96% year and a payout ratio of 37.71%. 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 HP P/E ratio at 12.73 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. HP P/B ratio is -26.00 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, HP has seen a 5-year revenue growth of 0.50%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with HP's ROE at -226.67% and IBM's ROE at 36.30%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $36.84 for HP and $232.71 for IBM. Over the past year, HP's prices ranged from $25.67 to $39.52, with a yearly change of 53.95%. 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.