Though they specialize in different aspects of the cloud, mobile, and the Internet of Things (IoT), both IBM (NYSE:IBM) and Intel (NASDAQ:INTC) share many of the same challenges. Both industry leaders are in the midst of making a significant transition away from the ebbing PC market to fast-growing markets like IoT and the cloud.

IBM and Intel have another thing in common: Each offer shareholders one of the better dividend yields in the tech sector, at 3.9% and nearly 3%, respectively. Based on the stock price movements following last month's Q3 earnings, it appears investors are slowly coming around to the notion that Intel isn't solely reliant on PCs any longer. IBM, however, hasn't been afforded the same courtesy from investors, as evidenced by its approximately 10% stock decline since Q3 results were announced on Oct. 19.

Which of the two titans offer growth and income investors the most upside? The answer to that largely depends on your level of patience and investment time horizon.

The case for Intel
As noted earlier, Intel fans seem to be a bit more forgiving as CEO Brian Krzanich continues to drive change. Last quarter's drop in Intel's client computing group revenue -- the unit largely responsible for PC-related sales -- was simply the last in a series of declines. This past quarter's $8.5 billion in sales, though up sequentially, was still 7% less than last year. So, how was Intel able to slightly exceed its own revenue forecast?

As the cloud and related technologies quickly become an estimated $100 billion marketplace, Intel has ideally positioned itself. Combined with the unprecedented amounts of data amassed via IoT-related "connections" in the world around us, storing, managing, and ultimately analyzing all of that information will require more, and more powerful, data centers.

Intel's data center revenue continues to climb -- up 12% last quarter to $4.1 billion -- and just as importantly makes up a larger portion of total sales with each passing quarter. Add in the 10% increase in IoT revenue last quarter, and the two burgeoning growth areas now account for about a third of total sales. In other words, Intel's reliance on PCs is slowly but steadily ebbing.

The case for IBM
When investors consider IBM, it seems the declining PC market shoots to the top of the list as a primary concern. However, like Intel, IBM CEO Ginni Rometty is also in the midst of a significant transition to cloud, IoT, analytics, and big data -- again, all markets that are expected to explode in the coming years.

IBM has made no secret of the fact that it intends to continue aggressively investing in its "strategic imperatives," which consist of the aforementioned, cutting-edge markets. IBM has spent billions to upgrade its already impressive big data analytics computing wizard Watson, along with a host of IoT and cloud solutions.

Add to IBM's numerous internal investments in its strategic imperatives a laundry list of acquisitions, and it's clear Rometty's plans to generate 40% of total revenues from these key areas in the next few years are more than wishful thinking. After last quarter's across the board improvements from its strategic imperative efforts, nearly 30% of IBM's current sales are of the strategic imperative ilk.

When it's said and done, both IBM and Intel warrant a good look from long-term growth investors interested in income. In the nearer term, Intel appears to have inched a bit ahead in terms of the Street recognizing its moving in the right direction, and its nearly 3% dividend yield is an added bonus. For investors who are overly risk adverse or have little patience, Intel should do nicely.

However at just 8.9 times forward earnings, IBM is trading at ridiculously low levels, meaning it offers growth potential, and likely not much more downside given its current, bare bones valuation. Do you have some time and patience? IBM warrants a spot near the top of your growth and income list.

Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.