Black Box (NYSE: IBM) and IBM Common Stock (NYSE:IBM) are both computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Dividends

IBM Common Stock pays an annual dividend of $6.28 per share and has a dividend yield of 4.3%. Black Box does not pay a dividend. IBM Common Stock pays out 45.5% of its earnings in the form of a dividend. Black Box has raised its dividend for 7 consecutive years and IBM Common Stock has raised its dividend for 18 consecutive years.

Valuation and Earnings

This table compares Black Box and IBM Common Stock’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Black Box $774.60 million 0.03 -$100.09 million N/A N/A
IBM Common Stock $79.14 billion 1.68 $5.75 billion $13.80 10.58

IBM Common Stock has higher revenue and earnings than Black Box.

Analyst Recommendations

This is a summary of current recommendations and price targets for Black Box and IBM Common Stock, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Box 0 0 0 0 N/A
IBM Common Stock 3 11 8 0 2.23

IBM Common Stock has a consensus target price of $166.19, suggesting a potential upside of 13.78%. Given IBM Common Stock’s higher possible upside, analysts plainly believe IBM Common Stock is more favorable than Black Box.

Risk and Volatility

Black Box has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, IBM Common Stock has a beta of 0.9, suggesting that its share price is 10% less volatile than the S&P 500.

Insider & Institutional Ownership

52.7% of Black Box shares are held by institutional investors. Comparatively, 56.4% of IBM Common Stock shares are held by institutional investors. 3.5% of Black Box shares are held by company insiders. Comparatively, 0.2% of IBM Common Stock shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Black Box and IBM Common Stock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Box -12.91% -19.41% -4.84%
IBM Common Stock 7.13% 69.84% 10.52%

Summary

IBM Common Stock beats Black Box on 12 of the 14 factors compared between the two stocks.

Black Box Company Profile

Black Box Corp. engages in the provision of digital solutions. It operates through the following segments: North America Products, North America Services, International Products, and International Services. It offers managed services, infrastructure services, communications lifecycle services, unified communications and data center services. The company was founded in 1976 and is headquartered in Lawrence, PA.

IBM Common Stock Company Profile

International Business Machines Corporation operates as an integrated technology and services company worldwide. Its Cognitive Solutions segment offers Watson, a cognitive computing platform that interacts in natural language, processes big data, and learns from interactions with people and computers. This segment also offers data and analytics solutions, including analytics and data management platforms, cloud data services, enterprise social software, talent management solutions, and solutions tailored by industry; and transaction processing software that runs mission-critical systems in banking, airlines, and retail industries. The company's Global Business Services segment offers business consulting services; delivers system integration, application management, maintenance, and support services for packaged software applications; and finance, procurement, talent and engagement, and industry-specific business process outsourcing services. Its Technology Services & Cloud Platforms segment provides cloud, project-based, outsourcing, and other managed services for enterprise IT infrastructure environments. This segment also offers technical support, and software and solution support; and integration software solutions. The company's Systems segment offers servers for businesses, cloud service providers, and scientific computing organizations; data storage products and solutions; and z/OS, an enterprise operating system. Its Global Financing segment provides lease, installment payment plans, and loan financing services; short-term working capital financing to suppliers, distributors, and resellers; and remanufacturing and remarketing services. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was founded in 1911 and is headquartered in Armonk, New York.

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