Salesforce vs IBM Which Is More Attractive?

Salesforce and IBM are two leading technology companies with strong presence in the stock market. Salesforce is known for its cloud-based software solutions for sales, customer service, and marketing, while IBM is a multinational technology and consulting corporation offering a wide range of products and services. Both companies have shown strong performance in the market, but Salesforce has experienced significant growth in recent years, outperforming IBM in terms of stock performance. Investors looking to invest in the tech industry may find these two stocks worth considering.

Salesforce or IBM?

When comparing Salesforce 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 Salesforce 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. Salesforce has a dividend yield of 0.47%, while IBM has a dividend yield of 2.34%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Salesforce reports a 5-year dividend growth of 0.00% year and a payout ratio of 13.71%. 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 Salesforce P/E ratio at 58.49 and IBM's P/E ratio at 30.73. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Salesforce P/B ratio is 5.72 while IBM's P/B ratio is 8.04.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Salesforce has seen a 5-year revenue growth of 1.16%, while IBM's is -0.22%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Salesforce's ROE at 9.58% and IBM's ROE at 27.14%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $325.25 for Salesforce and $213.50 for IBM. Over the past year, Salesforce's prices ranged from $211.76 to $344.87, with a yearly change of 62.86%. IBM's prices fluctuated between $147.35 and $237.37, with a yearly change of 61.09%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.