Analyzing Globant (GLOB) and International Business Machines (IBM)
Globant (NYSE: GLOB) and International Business Machines (NYSE:IBM) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.
Earnings & Valuation
This table compares Globant and International Business Machines’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Globant||$322.86 million||4.51||$35.87 million||$0.82||50.54|
|International Business Machines||$79.92 billion||1.76||$11.87 billion||$11.98||12.67|
International Business Machines has higher revenue and earnings than Globant. International Business Machines is trading at a lower price-to-earnings ratio than Globant, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for Globant and International Business Machines, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|International Business Machines||6||16||8||0||2.07|
Globant presently has a consensus price target of $44.83, suggesting a potential upside of 8.19%. International Business Machines has a consensus price target of $158.62, suggesting a potential upside of 4.46%. Given Globant’s stronger consensus rating and higher probable upside, equities analysts clearly believe Globant is more favorable than International Business Machines.
International Business Machines pays an annual dividend of $6.00 per share and has a dividend yield of 4.0%. Globant does not pay a dividend. International Business Machines pays out 50.1% of its earnings in the form of a dividend. International Business Machines has increased its dividend for 17 consecutive years.
This table compares Globant and International Business Machines’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|International Business Machines||14.43%||68.68%||10.82%|
Volatility & Risk
Globant has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.94, suggesting that its share price is 6% less volatile than the S&P 500.
Institutional & Insider Ownership
64.7% of Globant shares are held by institutional investors. Comparatively, 58.4% of International Business Machines shares are held by institutional investors. 0.2% of International Business Machines shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
International Business Machines beats Globant on 11 of the 17 factors compared between the two stocks.
Globant S.A. is a digitally native technology services company. The Company’s principal operating subsidiary is based in Buenos Aires, Argentina. During the year ended December 31, 2015, 83.7% of its revenues were generated by clients in North America, 11.0% in Latin America and Asia, and 5.3% in Europe. It builds digital journeys, which consists of different software products, including mobile apps, Web apps, sensors and other software and hardware appliances that work orchestrated by a backend that uses big data and fast data to create a understanding of each consumer and how to act upon each scenario. The Company delivers digital journeys with a comprehensive approach that includes Stay Relevant, which helps its customers stay fit for the future of their industries; Discover, which think and conceive specific digital journeys for each customer; Build, which creates each digital journey leveraging the work of its Studios, its services over platforms and its agile pods methodologies.
About International Business Machines
International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.
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