IBM: An Undervalued Dividend Stock To Buy?

We are off to the races with another dividend stock analysis. In today’s article, we will review the famous technology company: International Business Machines (IBM). We will review IBM, the company’s recent earnings, news and run the company through our dividend stock screener to determine if IBM is an undervalued dividend stock to buy.

IBM: About the Company

International Business Machines is one of the legacy technology companies. The company was at the forefront of technological change throughout the Cold War, and thereafter. After all, who doesn't know about the famous Watson supercomputer?

Today, IBM has transformed into a major player in the cloud hybrid and artificial intelligence sectors. Let’s also not forget about the company’s legacy technology business as well.

As of 12/31/20, the company reported revenue over $73b for the full fiscal year. That is billion with a B. To say the company is a large technology company is an understatement.

IBM transformed in 2019 with the acquisition of Red Hat. The company’s $34b acquisition helped drive the company’s push towards becoming a major player in the hybrid cloud sector. As you will see later in the article, this is acquisition will be instrumental for the future growth of the company.

 

IBM: Major News & Updates

In this section, I will review two major storylines for IBM. The company’s latest results per their earnings release and the company’s announced spin-off. Let’s start first with the earnings release.

IBM’s Last Earnings Release

IBM last released earnings in January 2021. The results were mixed. The company continued its trend of declining revenue. Annualized revenue was down 6% compared to last year. Further, the company’s major segments, including the cloud, saw declining revenues as well. This was particularly interesting given the company’s acquisition of Red Hat and push towards cloud services.

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Disclaimer: I do not recommend any decision to the reader or any user, please consult your own research. Thank you.

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