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 $214.4B against $109.3B — 2.0× the size. Accenture PLC trades at the lower P/E: 14.0× against 19.7×. International Business Machines Corporation grew revenue faster over the last twelve months: 7.90% against 6.74%. International Business Machines Corporation has the higher net margin (15.5% vs 10.7%) and the lower return on invested capital (7.86% vs 23.7%). Both pay a dividend; International Business Machines Corporation yields more (3.70% vs 1.33%). 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 13.95 19.70 14.63
P/S 1.47 3.07 1.13
P/B 3.27 6.14 2.10
Price to free cash flow 8.57 15.35 10.11
EV/EBITDA 7.84 16.31 8.56
EV/Sales 1.41 3.85 1.20
Earnings yield 7.17% 5.08% 4.56%
Free cash flow yield 11.67% 6.52% 4.37%

Profitability

Metric ACN IBM Information Technology Services median
Gross margin 32.01% 58.10% 31.05%
Operating margin 14.49% 16.08% 3.30%
Net margin 10.66% 15.52% 2.09%
Free cash flow margin 17.21% 20.02% 0.00%
Return on equity 24.13% 34.52% 4.12%
Return on assets 11.79% 7.13% 0.61%
Return on invested capital 23.66% 7.86% 0.57%

Growth

Metric ACN IBM Information Technology Services median
Revenue growth (TTM) 6.74% 7.90% 7.12%
EPS growth (last fiscal year) 6.21% 73.72% —
Revenue growth, 5-year CAGR 9.47% 4.12% 7.71%
Net income growth, 5-year CAGR 8.49% 13.64% 0.00%

Health

Metric ACN IBM Information Technology Services median
Debt to equity 0.16 1.79 0.45
Current ratio 1.34 0.79 1.66
Net debt to EBITDA (0.50) 2.95 0.44

Dividend

Metric ACN IBM Information Technology Services median
Dividend yield 1.33% 3.70% 1.21%
Payout ratio 0.39 2.81 0.00

Size

Metric ACN IBM Information Technology Services median
Market cap 109.34b 214.41b 1.36b

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