Contrasting International Business Machines (NYSE:IBM) and IonQ (NYSE:IONQ)

International Business Machines (NYSE:IBM) and IonQ (NYSE:IONQ) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, analyst recommendations, valuation, dividends, risk, profitability and institutional ownership.

Risk & Volatility

International Business Machines has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, IonQ has a beta of 2.54, suggesting that its share price is 154% more volatile than the S&P 500.

Institutional & Insider Ownership

59.0% of International Business Machines shares are held by institutional investors. Comparatively, 41.4% of IonQ shares are held by institutional investors. 0.2% of International Business Machines shares are held by company insiders. Comparatively, 5.2% of IonQ 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.

Analyst Recommendations

This is a breakdown of recent ratings for International Business Machines and IonQ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Business Machines	1	9	7	1	2.44
IonQ	0	5	7	0	2.58

International Business Machines presently has a consensus target price of $275.00, indicating a potential downside of 2.40%. IonQ has a consensus target price of $58.33, indicating a potential downside of 15.99%. Given International Business Machines’ higher possible upside, research analysts clearly believe International Business Machines is more favorable than IonQ.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
International Business Machines	9.11%	37.62%	7.08%
IonQ	-885.21%	-67.11%	-57.89%

Earnings and Valuation

This table compares International Business Machines and IonQ”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Business Machines	$62.75 billion	4.17	$6.02 billion	$6.16	45.74
IonQ	$43.07 million	478.57	-$331.65 million	($2.01)	-34.55

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

Summary

International Business Machines beats IonQ on 10 of the 14 factors compared between the two stocks.

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.

About IonQ

IonQ, Inc. engages in the development of general-purpose quantum computing systems in the United States. It sells access to quantum computers of various qubit capacities. The company makes access to its quantum computers through cloud platforms, such as Amazon Web Services (AWS) Amazon Braket, Microsoft’s Azure Quantum, and Google’s Cloud Marketplace, as well as through its cloud service. It also provides contracts associated with the design, development, and construction of specialized quantum computing hardware systems; maintenance and support services; and consulting services related to co-developing algorithms on quantum computing systems. The company was founded in 2015 and is headquartered in College Park, Maryland.