Accenture PLC (ACN) vs International Business Machines Corporation (IBM)

Accenture PLC and International Business Machines Corporation are both Information Technology Services companies. International Business Machines Corporation is the larger, with a market value of $220.6B against $137.6B — 1.6× the size. Accenture PLC trades at the lower P/E: 16.7× against 20.3×. International Business Machines Corporation grew revenue faster over the last twelve months: 7.90% against 6.47%. International Business Machines Corporation has the higher net margin (15.5% vs 11.3%) and the lower return on invested capital (7.86% vs 23.8%). Both pay a dividend; International Business Machines Corporation yields more (2.90% vs 2.87%). Across the 23 metrics below, Accenture PLC leads on 14 and International Business Machines Corporation on 9.

Valuation

Metric ACN IBM Information Technology Services median
P/E 16.73 20.31 16.42
P/S 1.86 3.17 1.06
P/B 119.41 6.34 1.57
Price to free cash flow 11.89 15.83 11.62
EV/EBITDA 10.34 16.72 9.74
EV/Sales 1.83 3.95 1.23
Earnings yield 5.98% 4.92% 4.25%
Free cash flow yield 8.41% 6.32% 4.50%

Profitability

Metric ACN IBM Information Technology Services median
Gross margin 32.05% 58.10% 29.97%
Operating margin 15.38% 16.08% 3.30%
Net margin 11.28% 15.52% 2.09%
Free cash flow margin 15.66% 20.02% 1.51%
Return on equity 50.11% 34.52% 3.67%
Return on assets 12.04% 7.13% 0.47%
Return on invested capital 23.76% 7.86% 0.57%

Growth

Metric ACN IBM Information Technology Services median
Revenue growth (TTM) 6.47% 7.90% 7.12%
EPS growth (last fiscal year) 13.60% 73.72% 1.38%
Revenue growth, 5-year CAGR 7.98% 4.12% 7.86%
Net income growth, 5-year CAGR 7.21% 13.64% 0.00%

Health

Metric ACN IBM Information Technology Services median
Debt to equity 0.31 1.79 0.45
Current ratio 1.43 0.79 1.66
Net debt to EBITDA (0.20) 2.95 0.45

Dividend

Metric ACN IBM Information Technology Services median
Dividend yield 2.87% 2.90% 1.97%
Payout ratio 0.48 0.60 0.30

Size

Metric ACN IBM Information Technology Services median
Market cap 137.64b 220.57b 1.11b

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