Undervalued Dividend Growth Stock Analysis: IBM (2024)

Intl. Business Machines -- Yield: 3.81%


Intl. Business Machines (NYSE:IBM) employs 379,592 people, generates revenue of $92,793.00 million and has a net income of $15,752.00 million. The current market capitalization stands at $132.10 billion.

International Business Machines Corporation is a technology company. The Company operates in five business segments: Global Technology Services (GTS), which includes Strategic Outsourcing, Integrated Technology Services, Cloud and Technology Support Services, and also provides information technology (IT) infrastructure and business process services; Global Business Services (GBS), which offers its services across Consulting and Systems Integration, Global Process Services and Application Management Services; Software, which consists of middleware and operating systems software; Systems and Technology (STG), which provides infrastructure technologies, and Global Financing, which provides financing solutions for products or services that are critical to the end users' business operations. Its IBM Watson Health Cloud platform collects clinical, research and social data from a range of health sources and creates a cloud-based data sharing hub. More on Reuters.

Intl. Business Machines’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $25,350.00 million. The EBITDA margin is 27.32% (the operating margin is 21.54% and the net profit margin 16.98%).

Financials:The total debt represents 34.72% of Intl. Business Machines assets and the total debt in relation to the equity amounts to 343.82%. Due to the financial situation, a return on equity of 90.89% was realized by Intl. Business Machines.

Twelve trailing months earnings per share reached a value of $14.57. Last fiscal year, Intl. Business Machines paid $4.25 in the form of dividends to shareholders.



Market Valuation:Here are the price ratios of the company: The P/E ratio is 9.34, the P/S ratio is 1.43 and the P/B ratio is finally 11.40. The dividend yield amounts to 3.81%.


Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (5)
Long-Term Stock Price Chart of Intl. Business Machines (IBM)
Undervalued Dividend Growth Stock Analysis: IBM (6)
Long-Term Dividend Payment History of Intl. Business Machines (IBM)
Undervalued Dividend Growth Stock Analysis: IBM (7)
Long-Term Dividend Yield History of Intl. Business Machines (IBM)


IBM increased dividends 38 out of the last 51 years. In 2014 the dividend yield was 2.3%. Dividend distributions were in February, May, August and November. The dividend payout ratio is 34%. In the last 10 years, the stock had an annual compounded return of 6.8% including dividends and stock price appreciation. This is 1.3% higher than the S&P 500 return of 5.4%. The company operates in the Technology sector.

These are the main competitors by yield...

HP -- Yield: 4.10%

HP (NYSE:HPQ) employs 302,000 people, generates revenue of $103,355.00 million and has a net income of $4,554.00 million. The current market capitalization stands at $21.81 billion.

HP’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12,202.00 million. The EBITDA margin is 11.81% (the operating margin is 5.29% and the net profit margin 4.41%).

Financials:The total debt represents 23.08% of HP assets and the total debt in relation to the equity amounts to 88.83%. Due to the financial situation, a return on equity of 16.71% was realized by HP.

Twelve trailing months earnings per share reached a value of $2.48. Last fiscal year, HP paid $0.67 in the form of dividends to shareholders.

Market Valuation:Here are the price ratios of the company: The P/E ratio is 4.92, the P/S ratio is 0.21 and the P/B ratio is finally 0.80. The dividend yield amounts to 4.10%.

Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (8)
Long-Term Stock Price Chart of HP (HPQ)
Undervalued Dividend Growth Stock Analysis: IBM (9)
Long-Term Dividend Payment History of HP (HPQ)
Undervalued Dividend Growth Stock Analysis: IBM (10)
Long-Term Dividend Yield History of HP (HPQ)

Cisco Systems -- Yield: 3.14%

Cisco Systems (NASDAQ:CSCO) employs 71,833 people, generates revenue of $49,161.00 million and has a net income of $8,981.00 million. The current market capitalization stands at $136.45 billion.

Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,696.00 million. The EBITDA margin is 27.86% (the operating margin is 21.91% and the net profit margin 18.27%).

Financials:The total debt represents 22.34% of Cisco Systems assets and the total debt in relation to the equity amounts to 42.47%. Due to the financial situation, a return on equity of 15.44% was realized by Cisco Systems.

Twelve trailing months earnings per share reached a value of $1.87. Last fiscal year, Cisco Systems paid $0.80 in the form of dividends to shareholders.

Market Valuation:Here are the price ratios of the company: The P/E ratio is 14.41, the P/S ratio is 2.76 and the P/B ratio is finally 2.28. The dividend yield amounts to 3.14%.

Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (11)
Long-Term Stock Price Chart of Cisco Systems (CSCO)
Undervalued Dividend Growth Stock Analysis: IBM (12)
Long-Term Dividend Payment History of Cisco Systems (CSCO)
Undervalued Dividend Growth Stock Analysis: IBM (13)
Long-Term Dividend Yield History of Cisco Systems (CSCO)

Microsoft -- Yield: 2.62%

Microsoft (NASDAQ:MSFT) employs 118,000 people, generates revenue of $93,580.00 million and has a net income of $12,193.00 million. The current market capitalization stands at $442.13 billion.

Microsoft’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $34,129.00 million. The EBITDA margin is 36.47% (the operating margin is 19.21% and the net profit margin 13.03%).

Financials:The total debt represents 20.03% of Microsoft assets and the total debt in relation to the equity amounts to 44.07%. Due to the financial situation, a return on equity of 14.36% was realized by Microsoft.

Twelve trailing months earnings per share reached a value of $1.49. Last fiscal year, Microsoft paid $1.24 in the form of dividends to shareholders.

Market Valuation:Here are the price ratios of the company: The P/E ratio is 37.19, the P/S ratio is 4.69 and the P/B ratio is finally 5.51. The dividend yield amounts to 2.62%.

Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (14)
Long-Term Stock Price Chart of Microsoft (MSFT)
Undervalued Dividend Growth Stock Analysis: IBM (15)
Long-Term Dividend Payment History of Microsoft (MSFT)
Undervalued Dividend Growth Stock Analysis: IBM (16)
Long-Term Dividend Yield History of Microsoft (MSFT)

SAP -- Yield: 1.56%

SAP (NYSE:SAP) employs 75,643 people, generates revenue of $19,359.89 million and has a net income of $3,616.20 million. The current market capitalization stands at $95.70 billion.

SAP’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6,368.04 million. The EBITDA margin is 32.89% (the operating margin is 24.66% and the net profit margin 18.68%).

Financials:The total debt represents 23.77% of SAP assets and the total debt in relation to the equity amounts to 46.87%. Due to the financial situation, a return on equity of 18.46% was realized by SAP.

Twelve trailing months earnings per share reached a value of $2.85. Last fiscal year, SAP paid $1.24 in the form of dividends to shareholders.

Market Valuation:Here are the price ratios of the company: The P/E ratio is 27.61, the P/S ratio is 4.96 and the P/B ratio is finally 4.35. The dividend yield amounts to 1.56%.

Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (17)
Long-Term Stock Price Chart of SAP (SAP)
Undervalued Dividend Growth Stock Analysis: IBM (18)
Long-Term Dividend Payment History of SAP (SAP)
Undervalued Dividend Growth Stock Analysis: IBM (19)
Long-Term Dividend Yield History of SAP (SAP)

Oracle Corporation -- Yield: 1.56%

Oracle Corporation (NYSE:ORCL) employs 132,000 people, generates revenue of $38,226.00 million and has a net income of $9,938.00 million. The current market capitalization stands at $163.93 billion.

Oracle Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $17,150.00 million. The EBITDA margin is 44.86% (the operating margin is 36.29% and the net profit margin 26.00%).

Financials:The total debt represents 36.95% of Oracle Corporation assets and the total debt in relation to the equity amounts to 84.21%. Due to the financial situation, a return on equity of 20.80% was realized by Oracle Corporation.

Twelve trailing months earnings per share reached a value of $2.13. Last fiscal year, Oracle Corporation paid $0.51 in the form of dividends to shareholders.

Market Valuation:Here are the price ratios of the company: The P/E ratio is 18.03, the P/S ratio is 4.30 and the P/B ratio is finally 3.44. The dividend yield amounts to 1.56%.

Stock Charts:

Undervalued Dividend Growth Stock Analysis: IBM (20)
Long-Term Stock Price Chart of Oracle Corporation (ORCL)
Undervalued Dividend Growth Stock Analysis: IBM (21)
Long-Term Dividend Payment History of Oracle Corporation (ORCL)
Undervalued Dividend Growth Stock Analysis: IBM (22)
Long-Term Dividend Yield History of Oracle Corporation (ORCL)
Competitor Stock Performance Comparison

Undervalued Dividend Growth Stock Analysis: IBM (2024)

FAQs

What is the dividend growth rate of IBM? ›

But even as IBM's current dividend yield hovers around 4%, the company's dividends have grown at a very slow pace, and the quarterly payout has risen by a mere 1 cent annually since 2020.

How do you find undervalued growth stocks? ›

How can you find undervalued stocks?
  • Look at the company's ratios.
  • Investigate the company's market cap.
  • Analyze the company's dividend yield and cash flow.
  • Take a look at the company's competitors.
  • Check out the company's financials.
  • Target stocks from undervalued sectors.
  • Use a stock screener.
  • Explore emerging industries.
Apr 22, 2024

Does IBM pay a good dividend? ›

Does International Business Machines have sufficient earnings to cover their dividend? Yes, IBM's past year earnings per share was $8.12, and their annual dividend per share is $6.64. IBM's dividend payout ratio is 69.05% ($6.64/$8.12) which is sustainable.

What are the undervalued dividend stocks in March 2024? ›

The four stocks on the NYSE or Nasdaq with the highest forward dividend yield that also trade for $25 or less as of March 2024 include Petrobras, Jiayin Group, Great Elm Capital Corp., and Angel Oak Mortgage REIT.

What is a reasonable dividend growth rate? ›

An average dividend growth rate is 8% to 10%. However, this can vary greatly among different stocks and industries.

How do you forecast dividend growth? ›

There are three main approaches to calculate the forward-looking growth rate:
  1. Use historical dividend growth rates.
  2. Observe the dividend growth rate prevalent in the industry in which the company operates.
  3. Calculate the sustainable growth rate.

Which is the most undervalued stock? ›

Top Undervalued Stocks: List of the Most Underrated Sector Shares in India 2024
  • ITC Ltd.
  • Asian Paints Ltd.
  • Sun Pharmaceutical Industries Ltd.
  • Avenue Supermarts Ltd.
  • Coal India Ltd.
  • Varun Beverages Ltd.
  • Eicher Motors Ltd.
  • Bharat Electronics Ltd.
Feb 19, 2024

What is the best indicator for undervalued stocks? ›

Price-to-earnings ratio (P/E)

A low P/E ratio could mean the stocks are undervalued. P/E ratio is calculated by dividing the price per share by the earnings per share (EPS). EPS is calculated by dividing the total company profit by the number of shares they've issued.

What stock is currently undervalued? ›

Undervalued Growth Stocks
SymbolNamePrice (Intraday)
MTCHMatch Group, Inc.31.29
KIMKimco Realty Corporation18.96
PYPLPayPal Holdings, Inc.66.98
DOLEDole plc12.28
18 more rows

How safe is IBM dividend? ›

It is a sign of how safe a company's dividend is and how much room it has for future growth. The higher the ratio, the greater the risk. Income investors often look for a dividend payout ratio of less than 60%. Alas, IBM's current dividend payout ratio is around 85%.

Will IBM increase its dividend in 2024? ›

ARMONK, N.Y., April 30, 2024 /PRNewswire/ -- The IBM (NYSE: IBM) board of directors today declared an increase in the regular quarterly cash dividend to $1.67 per common share, payable June 10, 2024 to stockholders of record as of May 10, 2024.

Is IBM a buy or sell? ›

IBM stock has received a consensus rating of buy. The average rating score is A3 and is based on 28 buy ratings, 18 hold ratings, and 1 sell ratings.

What are the three dividend stocks to buy and hold forever? ›

Three stocks with attributes that make them rock-solid candidates to buy and hold forever include:
  • JPMorgan Chase (JPM)
  • Home Depot (HD)
  • Procter & Gamble (PG)
1 day ago

What are the best cheap dividend stocks in 2024? ›

The five stocks on the NYSE or Nasdaq with the highest forward dividend yield that also trade for $25 or less as of April 2024 include Jiayin Group Inc., Petroleo Brasileiro, Frontline Plc, Hercules Capital, and Apollo Commercial Real Estate Finance, Inc.

What are the best dividend growth stocks? ›

10 Best Dividend Growth Stocks of May 2024
Stock (ticker)3-Year Avg. Ann. Dividend Growth
Target Corporation (TGT)17.4%
Domino's Pizza Inc. (DPZ)17.1%
Marsh & McLennan Companies, Inc. (MMC)15.2%
Automatic Data Processing, Inc (ADP)14.6%
6 more rows

What is 5 year dividend growth rate? ›

Dividend Growth 5yr is the geometric average dividend growth rate over the past 5 years, shown as a percentage, for example 3.32%.

What is the expected growth rate of IBM? ›

IBM's revenue rose 6% in 2022 and 2% in 2023, and analysts expect 3% growth in 2024. Its adjusted EPS grew 15% in 2022 and 5% in 2023, and is expected to rise 5% in 2024. Those growth rates indicate IBM's turnaround strategies are paying off and turning it into a reliable blue-chip tech stock again.

What are the dividends paid by IBM? ›

  • Ex-Dividend Date 02/08/2024.
  • Dividend Yield 3.64%
  • Annual Dividend $6.64.
  • P/E Ratio 22.41.

What is the dividend growth rate of General Dynamics? ›

Dividend History and Growth

General Dynamics Corporation ( GD ) dividend payments per share are an average of 5.49% over the past 12 months, 6.21% over the past 36 months, 7.14% over the past 60 months, and 8.87% over the past 120 months.

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