International Business Machines (NYSE:IBM) & Kyndryl (NYSE:KD) Critical Analysis

Kyndryl (NYSE:KD) and International Business Machines (NYSE:IBM) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.

Profitability

This table compares Kyndryl and International Business Machines’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kyndryl	0.58%	12.24%	1.33%
International Business Machines	15.99%	34.37%	7.63%

Risk & Volatility

Kyndryl has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, International Business Machines has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Insider and Institutional Ownership

71.5% of Kyndryl shares are owned by institutional investors. Comparatively, 59.0% of International Business Machines shares are owned by institutional investors. 2.0% of Kyndryl shares are owned by insiders. Comparatively, 0.3% of International Business Machines shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Kyndryl and International Business Machines”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kyndryl	$15.09 billion	0.20	$199.00 million	$0.37	37.37
International Business Machines	$67.53 billion	3.62	$10.59 billion	$11.73	22.06

International Business Machines has higher revenue and earnings than Kyndryl. International Business Machines is trading at a lower price-to-earnings ratio than Kyndryl, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings for Kyndryl and International Business Machines, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kyndryl	2	7	0	0	1.78
International Business Machines	2	13	19	0	2.50

Kyndryl presently has a consensus target price of $16.50, indicating a potential upside of 19.34%. International Business Machines has a consensus target price of $266.12, indicating a potential upside of 2.87%. Given Kyndryl’s higher possible upside, equities analysts plainly believe Kyndryl is more favorable than International Business Machines.

Summary

International Business Machines beats Kyndryl on 9 of the 14 factors compared between the two stocks.

About Kyndryl

Kyndryl Holdings, Inc. operates as a technology services company and IT infrastructure services provider worldwide. The company offers cloud services; core enterprise and zCloud services; application, data, and artificial intelligence services; digital workplace services; security and resiliency services; and network services and edge services. It serves financial, communications, retail and travel, and automotive industries. The company was incorporated in 2020 and is headquartered in New York, New York.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.