IBM vs Teradata Which Should You Buy?

IBM and Teradata are two leading companies in the technology industry known for their data management and analytics solutions. Both companies have a strong presence in the market and are considered major players in the field. Investors often compare IBM and Teradata stocks to determine the best investment opportunities. Understanding the financial performance, market position, and growth prospects of these companies is essential for making informed investment decisions. This article will explore the key differences between IBM and Teradata stocks to help investors make informed choices.

IBM or Teradata?

When comparing IBM and Teradata, 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 Teradata.

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 2.9%, while Teradata 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, Teradata 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 33.11 and Teradata's P/E ratio at 38.17. 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 8.66 while Teradata's P/B ratio is 25.04.

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 Teradata's is 0.01%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with IBM's ROE at 27.14% and Teradata's ROE at 84.54%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $230.12 for IBM and $32.18 for Teradata. Over the past year, IBM's prices ranged from $157.89 to $239.35, with a yearly change of 51.59%. Teradata's prices fluctuated between $24.02 and $49.44, with a yearly change of 105.83%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.