IBM vs AT&T Which Is More Attractive?

IBM and AT&T are two giants in the technology and telecommunications industries, respectively. Both companies have a long history of success and innovation, making them attractive options for investors. IBM is known for its focus on artificial intelligence and cloud computing, while AT&T is a leading provider of telecommunications services. As the two companies compete for market share and revenue, investors must carefully consider the strengths and weaknesses of each stock before making investment decisions.

IBM or AT&T?

When comparing IBM and AT&T, 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 IBM and AT&T.

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. IBM has a dividend yield of 2.89%, while AT&T has a dividend yield of 4.7%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. IBM reports a 5-year dividend growth of 1.32% year and a payout ratio of 95.65%. On the other hand, AT&T reports a 5-year dividend growth of -11.11% year and a payout ratio of 90.45%.

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 IBM P/E ratio at 33.21 and AT&T's P/E ratio at 18.79. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. IBM P/B ratio is 8.69 while AT&T's P/B ratio is 1.66.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, IBM has seen a 5-year revenue growth of -0.22%, while AT&T's is -0.32%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 27.14% and AT&T's ROE at 8.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $230.26 for IBM and $23.26 for AT&T. Over the past year, IBM's prices ranged from $157.89 to $239.35, with a yearly change of 51.59%. AT&T's prices fluctuated between $15.94 and $24.03, with a yearly change of 50.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.