IBM vs Nokia Which Is a Better Investment?

IBM and Nokia are two prominent technology companies with a long-standing history in the global market. While both companies have faced their fair share of challenges, they continue to be strong players in the industry. Investors often compare the performance of IBM and Nokia stocks to make informed decisions about their portfolios. By analyzing factors such as market trends, financial reports, and industry news, investors can gain insights into the potential growth and opportunities presented by these two companies.

IBM or Nokia?

When comparing IBM and Nokia, 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 Nokia.

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 Nokia has a dividend yield of 3.23%. 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, Nokia reports a 5-year dividend growth of 0.00% year and a payout ratio of 173.43%.

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 Nokia's P/E ratio at 56.29. 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 Nokia's P/B ratio is 1.11.

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 Nokia's is -0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 27.14% and Nokia's ROE at 1.97%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $230.26 for IBM and $4.41 for Nokia. Over the past year, IBM's prices ranged from $157.89 to $239.35, with a yearly change of 51.59%. Nokia's prices fluctuated between $3.20 and $4.95, with a yearly change of 54.69%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.