Stock Analysis: International Business Machines Might Grow 15% Or Not

The company was founded in 1911 and is headquartered in Armonk, NY.

International Business Machines Corporation with the ticker (IBM), is an information technology company, providing integrated solutions in information technology and business processes.

It operates through five segments: Software, Consulting, Infrastructure, Financing, and Other. 

Three key data points gauge IBM (or any dividend paying entity):

(1) Price 

(2) Dividends

(3) Returns

Those three keys also indicate if any company has made, is making, and will make money.

IBM Price

IBM’s single share price fell $36.22 (or about 14%) from $259.72 to $223.50 in the past year, per Tuesday’s opening market report.

23 analysts cover the stock. The median of their one year price projections projects a $29.33 gain for the coming year. 

However, the average of the past three year price progression shows an average annual gain of $26.84, which I’ll use for the annual return, after I discuss dividends.  

IBM Dividends

International Business Machines Corporation has paid quarterly dividends since September, 1989. Its most recent Quarterly dividend of $1.69 will be paid September 10 (to shareholders of record August 10th, yielding 2.99% annually (per Tuesday’s opening market report.)

IBM Returns

Putting it all together, as of July 28th, a possible gross gain of $33.60 was projected. The $26.84 per share average annual gain was added to the $6.76 forward looking annual dividends to make that $33.60 gross gain.

A little under $1000 invested in International Business Machines Corporation at Tuesday’s $223.50 opening share price would buy 4.47 shares which multiply the $33.60 gross gain to $150.34 for the coming year, or about 15%.

My dividend dogcatcher rule is to only buy initial shares of a dividend stock that pay an annual dividend (from $1000 invested) that is greater than the cost of one share.

International Business Machines Corporation projected annual dividend from $1K invested is $31.30. IBM shows an annual dividend which proves to be over 7 times LESS than the recent $223.50 single-share price.

I’m waiting to buy IBM stock at about $82 per share where price equals the dividend paid from $1k invested.

The exact track of IBM’s future share price and dividend will entirely be determined by market action and company finances.  

Remember the best way to track stock performance and dividend payments is through direct ownership of company shares.