IBM vs Netflix Which Is Superior?

IBM and Netflix are two prominent companies in the technology and entertainment industries, respectively. While IBM is a long-standing tech giant with a history dating back over a century, Netflix has quickly risen to prominence as a leading streaming service provider. In recent years, both companies have experienced fluctuations in their stock prices, with IBM focusing on cloud computing and artificial intelligence, and Netflix continuously expanding its original content library. This comparison will analyze the performance and potential of IBM and Netflix in the stock market.

IBM or Netflix?

When comparing IBM and Netflix, 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 Netflix.

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 2.34%, while Netflix has a dividend yield of -%. 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, Netflix reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 30.73 and Netflix's P/E ratio at 44.33. 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 8.04 while Netflix's P/B ratio is 15.18.

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 Netflix's is 1.11%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 27.14% and Netflix's ROE at 35.86%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $213.50 for IBM and $795.57 for Netflix. Over the past year, IBM's prices ranged from $147.35 to $237.37, with a yearly change of 61.09%. Netflix's prices fluctuated between $442.60 and $806.82, with a yearly change of 82.29%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.