Daily Stock Analysis: International Business Machines Corp

By Fredrik Arnold
Tuesday, January 31, 2023 4:32 AM EDT

International Business Machines Corp bears the ticker symbol (IBM), and this is my first mention of IBM Corp for this new Viking Portfolio or any of my previous seven folios.

Freepik

IBM looks to be a part of every aspect of an enterprise’s IT needs. The company primarily sells software, IT services, consulting, and hardware.

IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients—which includes 95% of all Fortune 500.

While IBM is a B2B company, IBM’s outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.

The company was formerly known as Computing-Tabulating-Recording Co.

International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

Three key data points gauge International Business Machines Corp or any dividend paying firm:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

IBM Price

IBM price per share was $135.35 at Monday’s market close. In the past year, IBM’s share price grew by $4.56 or about 3.5%.

If IBM stock trades in the range of $105.00 to $150.00 this next year, its recent $135.35 share price might reach  $144.00 by next year. That upside estimate of $8.65 is about $0.22 over the median of one year price targets pinned by 15 analysts reporting to brokers.

IBM Dividends

IBM Corp most recent quarterly dividend of $1.65 casts a forward annual yield of 4.88%.

IBM Returns

Adding the $6.60 annual estimated IBM Corp dividend to my one-year price upside estimate of $8.65 reveals a $15.25 potential gross gain estimate per share.

At Monday’s $135.35 closing price, a little under $1000 would buy 7 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $1.43 per share.

Subtract that maybe $1.43 brokerage cost from my estimated $15.25 gross gain makes a net gain of $13.82 X 7 shares = $96.75 for an 9.7% net gain including a 4.88% annual dividend yield.

In the next year our $1K investment in shares of IBM Corp would generate $66.00 in cash dividends. However, a single share of IBM stock at Monday’s $135.35 price is nearly over 2 times greater than the estimated annual dividend income from our $1000.00 investment.

So, by my dogcatcher ideal, this no time to buy IBM Corp shares based on their dividends for 2023. The current dividend from $1K invested is 2.05 times higher than the HPQ single share price. Consider yourself alerted.

Wait for the International Business Machines Corp share price to drop below $81.25. That’s the ticket!

All of the estimates above are speculation based on the past history of investment in shares of International Business Machines Corp. Only time and money invested in this stock will determine its future market value.

More By This Author:

Daily Stock Analysis: HP Inc., Monday, Jan. 30
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Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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