ARI Network Services (NASDAQ: ARIS) and International Business Machines Corporation (NYSE:IBM) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, analyst recommendations, dividends and risk.

Volatility & Risk

ARI Network Services has a beta of 0.22, meaning that its share price is 78% less volatile than the S&P 500. Comparatively, International Business Machines Corporation has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Institutional and Insider Ownership

36.1% of ARI Network Services shares are held by institutional investors. Comparatively, 57.9% of International Business Machines Corporation shares are held by institutional investors. 8.7% of ARI Network Services shares are held by insiders. Comparatively, 0.2% of International Business Machines Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

International Business Machines Corporation pays an annual dividend of $6.00 per share and has a dividend yield of 4.1%. ARI Network Services does not pay a dividend. International Business Machines Corporation pays out 49.9% of its earnings in the form of a dividend. International Business Machines Corporation has increased its dividend for 17 consecutive years.

Valuation & Earnings

This table compares ARI Network Services and International Business Machines Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
ARI Network Services $51.16 million 2.42 $6.53 million $0.14 50.68
International Business Machines Corporation $78.44 billion 1.72 $17.19 billion $12.03 12.04

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

Analyst Ratings

This is a breakdown of recent ratings for ARI Network Services and International Business Machines Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ARI Network Services 1 1 0 0 1.50
International Business Machines Corporation 6 14 7 0 2.04

International Business Machines Corporation has a consensus price target of $157.63, suggesting a potential upside of 8.85%. Given International Business Machines Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe International Business Machines Corporation is more favorable than ARI Network Services.

Profitability

This table compares ARI Network Services and International Business Machines Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ARI Network Services 11.55% 18.27% 9.56%
International Business Machines Corporation 14.58% 71.53% 11.02%

Summary

International Business Machines Corporation beats ARI Network Services on 13 of the 17 factors compared between the two stocks.

ARI Network Services Company Profile

ARI Network Services, Inc. (ARI) provides Website, software and data solutions. The Company’s solutions include Lead Generation and eCommerce Websites, eCatalogs, Business Management Software, Digital Marketing Services. It offers a menu of Website add-ons, including a mobile inventory management application, third-party inventory integrations and business management integrations. Its eCatalog solutions offer access to its library of electronic product content through a suite of software-as-a-service (SaaS) and data-as-a-service (DaaS) solutions. Its Business Management Software solutions are offered in the automotive tire and wheel aftermarket (ATW) aftermarket under the TCS Technologies, an ARI Company brand name. ARI’s Digital Marketing Services include search engine optimization, e-mail marketing, search engine marketing (PPC), online reputation management and online directory management. The Company’s other solutions include software, professional services and hosting services.

International Business Machines Corporation Company Profile

International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.

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