Intel vs IBM Which Is a Smarter Choice?

Intel and IBM are two of the most well-known technology companies in the world, with a long-standing rivalry in the semiconductor industry. Both companies have a rich history of innovation and have played a crucial role in shaping the modern technology landscape. Despite their similarities, Intel and IBM have taken different paths in recent years, with Intel focusing more on the consumer market and IBM shifting its focus towards enterprise solutions. This has led to varying performances in their respective stock prices, making them interesting options for investors looking to capitalize on the ever-changing tech industry.

Intel or IBM?

When comparing Intel 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 Intel 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. Intel has a dividend yield of 1.84%, while IBM has a dividend yield of 2.89%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Intel reports a 5-year dividend growth of -9.22% year and a payout ratio of -13.32%. On the other hand, IBM reports a 5-year dividend growth of 1.32% year and a payout ratio of 95.65%.

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 Intel P/E ratio at -5.47 and IBM's P/E ratio at 33.21. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Intel P/B ratio is 0.88 while IBM's P/B ratio is 8.69.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Intel has seen a 5-year revenue growth of -0.16%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Intel's ROE at -14.98% and IBM's ROE at 27.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $20.25 for Intel and $230.26 for IBM. Over the past year, Intel's prices ranged from $18.51 to $51.28, with a yearly change of 177.04%. IBM's prices fluctuated between $157.89 and $239.35, with a yearly change of 51.59%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.