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International Business Machines

NYSE:IBM
Snowflake Description

Established dividend payer with mediocre balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
IBM
NYSE
$109B
Market Cap
  1. Home
  2. US
  3. Software
Company description

International Business Machines Corporation operates as an integrated technology and services company worldwide. The last earnings update was 48 days ago. More info.


Add to Portfolio Compare Print
  • International Business Machines has significant price volatility in the past 3 months.
IBM Share Price and Events
7 Day Returns
-4.2%
NYSE:IBM
-1.4%
US IT
-1.5%
US Market
1 Year Returns
-24.3%
NYSE:IBM
9%
US IT
-4.2%
US Market
IBM Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
International Business Machines (IBM) -4.2% -4.5% -21.9% -24.3% -14.3% -36.3%
US IT -1.4% -4.2% -12.3% 9% 57.1% 70.1%
US Market -1.5% -5.2% -11.2% -4.2% 27.3% 35.3%
1 Year Return vs Industry and Market
  • IBM underperformed the IT industry which returned 9% over the past year.
  • IBM underperformed the Market in United States of America which returned -4.2% over the past year.
Price Volatility
IBM
Industry
5yr Volatility vs Market
Related Companies

Value

 Is International Business Machines undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of International Business Machines to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for International Business Machines.

NYSE:IBM Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 23 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 12.5%
Perpetual Growth Rate 10-Year US Government Bond Rate 3%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:IBM
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 3%
Equity Risk Premium S&P Global 7.1%
IT Unlevered Beta Simply Wall St/ S&P Global 1.01
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.012 (1 + (1- 21%) (43.2%))
1.357
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.36
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.95% + (1.357 * 7.05%)
12.52%

Discounted Cash Flow Calculation for NYSE:IBM using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for International Business Machines is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:IBM DCF 1st Stage: Next 5 year cash flow forecast
2019 2020 2021 2022 2023
Levered FCF (USD, Millions) 12,692.20 12,932.20 12,000.00 12,300.00 11,651.92
Source Analyst x10 Analyst x10 Analyst x2 Analyst x2 Est @ -5.27%
Present Value
Discounted (@ 12.52%)
11,280.30 10,215.03 8,424.26 7,674.31 6,461.23
Present value of next 5 years cash flows $44,055.13
NYSE:IBM DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2023 × (1 + g) ÷ (Discount Rate – g)
= $11,651.92 × (1 + 2.95%) ÷ (12.52% – 2.95%)
$125,391.53
Present Value of Terminal Value = Terminal Value ÷ (1 + r)5
= $125,391.53 ÷ (1 + 12.52%)5
$69,532.22
NYSE:IBM Total Equity Value
Calculation Result
Total Equity Value = Present value of next 5 years cash flows + Terminal Value
= $44,055.13 + $69,532.22
$113,587.35
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $113,587.35 / 908.79
$124.99
NYSE:IBM Discount to Share Price
Calculation Result
Value per share (USD) From above. $124.99
Current discount Discount to share price of $116.10
= -1 x ($116.10 - $124.99) / $124.99
7.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price International Business Machines is available for.
Intrinsic value
7%
Share price is $116.1 vs Future cash flow value of $124.99
Current Discount Checks
For International Business Machines to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • International Business Machines's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • International Business Machines's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for International Business Machines's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are International Business Machines's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:IBM PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-09-30) in USD $6.23
NYSE:IBM Share Price ** NYSE (2018-12-17) in USD $116.1
United States of America IT Industry PE Ratio Median Figure of 77 Publicly-Listed IT Companies 24.82x
United States of America Market PE Ratio Median Figure of 3,017 Publicly-Listed Companies 16.77x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of International Business Machines.

NYSE:IBM PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:IBM Share Price ÷ EPS (both in USD)

= 116.1 ÷ 6.23

18.64x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • International Business Machines is good value based on earnings compared to the US IT industry average.
  • International Business Machines is overvalued based on earnings compared to the United States of America market.
Price based on expected Growth
Does International Business Machines's expected growth come at a high price?
Raw Data
NYSE:IBM PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 18.64x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts
2.3%per year
United States of America IT Industry PEG Ratio Median Figure of 63 Publicly-Listed IT Companies 1.77x
United States of America Market PEG Ratio Median Figure of 2,105 Publicly-Listed Companies 1.16x

*Line of best fit is calculated by linear regression .

NYSE:IBM PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 18.64x ÷ 2.3%

8x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • International Business Machines is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on International Business Machines's assets?
Raw Data
NYSE:IBM PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-09-30) in USD $21.77
NYSE:IBM Share Price * NYSE (2018-12-17) in USD $116.1
United States of America IT Industry PB Ratio Median Figure of 120 Publicly-Listed IT Companies 3.87x
United States of America Market PB Ratio Median Figure of 5,082 Publicly-Listed Companies 1.7x
NYSE:IBM PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:IBM Share Price ÷ Book Value per Share (both in USD)

= 116.1 ÷ 21.77

5.33x

* Primary Listing of International Business Machines.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • International Business Machines is overvalued based on assets compared to the US IT industry average.
X
Value checks
We assess International Business Machines's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the IT industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the IT industry average (and greater than 0)? (1 check)
  5. International Business Machines has a total score of 1/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is International Business Machines expected to perform in the next 1 to 3 years based on estimates from 23 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
2.3%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is International Business Machines expected to grow at an attractive rate?
  • International Business Machines's earnings growth is positive but not above the low risk savings rate of 3%.
Growth vs Market Checks
  • International Business Machines's earnings growth is positive but not above the United States of America market average.
  • International Business Machines's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:IBM Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:IBM Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 23 Analysts 2.3%
NYSE:IBM Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 23 Analysts 0.2%
United States of America IT Industry Earnings Growth Rate Market Cap Weighted Average 17.3%
United States of America IT Industry Revenue Growth Rate Market Cap Weighted Average 9.3%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 14.1%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:IBM Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:IBM Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 81,600 15,900 11,300 1
2021-12-31 80,800 15,400 10,800 1
2020-12-31 79,751 16,759 10,981 14
2019-12-31 79,245 15,930 10,823 20
2018-12-31 79,738 16,564 10,805 23
NYSE:IBM Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-09-30 80,373 16,861 5,718
2018-06-30 80,771 16,199 5,751
2018-03-31 80,056 17,371 5,680
2017-12-31 79,139 16,724 5,758
2017-09-30 78,366 14,970 11,316
2017-06-30 78,439 15,517 11,445
2017-03-31 79,390 15,509 11,617
2016-12-31 79,919 17,084 11,881
2016-09-30 80,208 18,384 11,836
2016-06-30 80,261 18,503 11,943
2016-03-31 80,835 18,928 12,965
2015-12-31 81,741 17,255 13,364

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • International Business Machines's earnings are expected to grow by 2.3% yearly, however this is not considered high growth (20% yearly).
  • International Business Machines's revenue is expected to grow by 0.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:IBM Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below

All data from International Business Machines Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:IBM Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31
2021-12-31
2020-12-31 12.52 12.99 11.95 7.00
2019-12-31 12.07 14.10 11.46 12.00
2018-12-31 11.79 13.81 11.49 14.00
NYSE:IBM Past Financials Data
Date (Data in USD Millions) EPS *
2018-09-30 6.23
2018-06-30 6.23
2018-03-31 6.12
2017-12-31 6.17
2017-09-30 12.05
2017-06-30 12.11
2017-03-31 12.22
2016-12-31 12.44
2016-09-30 12.32
2016-06-30 12.36
2016-03-31 13.34
2015-12-31 13.65

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • International Business Machines is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).
X
Future performance checks
We assess International Business Machines's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
International Business Machines has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has International Business Machines performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare International Business Machines's growth in the last year to its industry (IT).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • International Business Machines's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
  • International Business Machines's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • International Business Machines's 1-year earnings growth is negative, it can't be compared to the US IT industry average.
Earnings and Revenue History
International Business Machines's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from International Business Machines Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:IBM Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-09-30 80,373.00 5,718.00 19,717.00 5,596.00
2018-06-30 80,771.00 5,751.00 19,847.00 5,635.00
2018-03-31 80,056.00 5,680.00 20,040.00 5,708.00
2017-12-31 79,139.00 5,758.00 19,986.00 5,787.00
2017-09-30 78,366.00 11,316.00 20,442.00 5,643.00
2017-06-30 78,439.00 11,445.00 19,497.00 5,749.00
2017-03-31 79,390.00 11,617.00 19,782.00 5,777.00
2016-12-31 79,919.00 11,881.00 19,977.00 5,751.00
2016-09-30 80,208.00 11,836.00 20,188.00 5,682.00
2016-06-30 80,261.00 11,943.00 20,100.00 5,572.00
2016-03-31 80,835.00 12,965.00 19,788.00 5,407.00
2015-12-31 81,741.00 13,364.00 19,589.00 5,247.00
2015-09-30 83,795.00 14,417.00 19,844.00 5,205.00
2015-06-30 86,913.00 14,911.00 20,474.00 5,272.00
2015-03-31 90,147.00 15,637.00 21,054.00 5,333.00
2014-12-31 92,793.00 15,751.00 21,549.00 5,437.00
2014-09-30 96,066.00 16,453.00 22,131.00 5,569.00
2014-06-30 97,007.00 17,137.00 22,116.00 5,571.00
2014-03-31 97,196.00 16,379.00 22,183.00 5,501.00
2013-12-31 98,368.00 16,881.00 22,395.00 5,743.00
2013-09-30 100,286.00 16,498.00 22,332.00 5,871.00
2013-06-30 101,695.00 16,182.00 22,435.00 6,049.00
2013-03-31 103,242.00 16,570.00 22,465.00 6,345.00
2012-12-31 102,874.00 16,999.00 22,494.00 5,816.00
2012-09-30 104,689.00 16,261.00 22,712.00 6,277.00
2012-06-30 106,099.00 16,277.00 23,014.00 6,290.00
2012-03-31 106,982.00 16,058.00 23,188.00 6,272.00
2011-12-31 106,916.00 15,855.00 23,134.00 6,258.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • International Business Machines has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • International Business Machines used its assets less efficiently than the US IT industry average last year based on Return on Assets.
  • International Business Machines's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess International Business Machines's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the IT industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
International Business Machines has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is International Business Machines's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up International Business Machines's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • International Business Machines is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • International Business Machines's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of International Business Machines's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 1x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from International Business Machines Company Filings, last reported 2 months ago.

NYSE:IBM Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-09-30 19,918.00 47,077.00 14,495.00
2018-06-30 18,648.00 45,581.00 11,707.00
2018-03-31 18,290.00 46,465.00 12,842.00
2017-12-31 17,725.00 46,858.00 12,582.00
2017-09-30 19,757.00 45,642.00 11,515.00
2017-06-30 18,544.00 45,676.00 12,297.00
2017-03-31 18,448.00 42,786.00 10,695.00
2016-12-31 18,392.00 42,176.00 8,527.00
2016-09-30 17,159.00 42,483.00 9,968.00
2016-06-30 15,889.00 44,525.00 10,617.00
2016-03-31 15,072.00 45,557.00 14,869.00
2015-12-31 14,424.00 39,892.00 8,194.00
2015-09-30 13,451.00 39,660.00 9,568.00
2015-06-30 13,837.00 38,668.00 8,760.00
2015-03-31 12,289.00 38,827.00 8,809.00
2014-12-31 12,014.00 40,722.00 8,481.00
2014-09-30 14,395.00 45,704.00 9,570.00
2014-06-30 17,513.00 46,470.00 9,725.00
2014-03-31 16,740.00 43,992.00 9,704.00
2013-12-31 22,929.00 39,731.00 11,066.00
2013-09-30 20,008.00 36,180.00 10,273.00
2013-06-30 17,883.00 34,122.00 10,383.00
2013-03-31 19,214.00 33,397.00 12,058.00
2012-12-31 18,984.00 33,269.00 11,176.00
2012-09-30 21,666.00 33,667.00 12,305.00
2012-06-30 20,564.00 32,435.00 11,230.00
2012-03-31 20,783.00 32,053.00 12,391.00
2011-12-31 20,235.00 31,320.00 11,972.00
  • International Business Machines's level of debt (236.4%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (180.7% vs 236.4% today).
  • Debt is well covered by operating cash flow (35.8%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 26.7x coverage).
X
Financial health checks
We assess International Business Machines's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. International Business Machines has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is International Business Machines's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
5.41%
Current annual income from International Business Machines dividends. Estimated to be 5.46% next year.
If you bought $2,000 of International Business Machines shares you are expected to receive $108 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • International Business Machines's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.52%).
  • International Business Machines's dividend is above the markets top 25% of dividend payers in United States of America (3.77%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:IBM Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 23 Analyst Estimates (S&P Global) See Below
United States of America IT Industry Average Dividend Yield Market Cap Weighted Average of 33 Stocks 1.6%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1983 Stocks 2.6%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.9%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.5%
United States of America Top 25% Dividend Yield 75th Percentile 3.8%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:IBM Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31
2021-12-31
2020-12-31 6.57 12.00
2019-12-31 6.38 15.00
2018-12-31 6.12 15.00
NYSE:IBM Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2018-10-30 6.280 5.210
2018-07-31 6.280 4.383
2018-04-24 6.280 4.363
2018-01-30 6.000 3.881
2017-10-31 6.000 3.847
2017-07-25 6.000 4.108
2017-04-25 6.000 3.910
2017-01-31 5.600 3.202
2016-10-25 5.600 3.421
2016-10-17 5.600 3.701
2016-04-26 5.600 3.617
2016-01-26 5.200 3.765
2015-10-27 5.200 3.839
2015-07-28 5.200 3.490
2015-04-28 5.200 3.088
2015-01-27 4.400 2.737
2015-01-20 4.400 2.838
2014-07-29 4.400 2.540
2014-04-29 4.400 2.348
2014-01-28 3.800 2.038
2013-10-29 3.800 2.093
2013-07-30 3.800 2.046
2013-04-30 3.800 1.899
2013-01-29 3.400 1.657
2013-01-22 3.400 1.674
2012-07-31 3.400 1.729
2012-04-24 3.400 1.740
2012-01-31 3.000 1.500
2011-10-25 3.000 1.616
2011-07-26 3.000 1.731
2011-04-26 3.000 1.760
2011-01-25 2.600 1.600
2010-10-26 2.600 1.779
2010-07-27 2.600 1.975
2010-04-27 2.600 2.040
2010-01-26 2.200 1.728
2009-10-27 2.200 1.723
2009-07-28 2.200 1.834
2009-04-28 2.200 2.074
2009-01-27 2.000 2.125
2008-12-18 2.000 2.342

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of International Business Machines's earnings are paid to the shareholders as a dividend.
  • Dividends paid are not well covered by earnings (1x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (2.2x coverage).
X
Income/ dividend checks
We assess International Business Machines's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.9%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can International Business Machines afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. International Business Machines has a total score of 5/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of International Business Machines's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Ginni Rometty
COMPENSATION $18,595,350
AGE 59
TENURE AS CEO 6.9 years
CEO Bio

Ms. Virginia M. Rometty, also known as Ginni, has been the Chairman of International Business Machines Corporation (also known as IBM Corp.) since October 1, 2012 and also has been its Chief Executive Officer and President since January 1, 2012. Mrs. Rometty has responsibility for the overall strategy and business development for Global Services, including advanced services solutions, the services asset strategy and acquisition strategy. She began her career with IBM in 1981. She served as Senior Vice President of Global Business Services at International Business Machines Corporation from 2005 to 2009 and also served as its Senior Vice President of Global Sales & Distribution from 2009 to 2010, Senior Vice President from 2010 to 2012, Group Executive of Sales, Marketing & Strategy from 2010 to 2012 and Senior Vice President of Enterprise Business Services-IBM Global Services since July 2005. She served as Senior Vice President of Global Business Services and Managing Partner at IBM Business Consulting Services, Inc. She served as General Manager of IBM Global Services. She was responsible for strategic leadership, operations and client relationships of the Global Services business in the United States, Canada and Latin America. She also served as the General Manager of Strategy, Marketing and Sales Operations for IBM Global Services Worldwide. Before joining IBM's services business, She served as General Manager of IBM's Global Insurance and Financial Services Sector, where she led IBM's business strategy for the worldwide insurance marketplace, with responsibility for marketing, sales and consulting. She also supervised the operations of IBM's Insurance Research Centers in Hawthorne, N.Y., Zurich, Switzerland and Yamaha, Japan and was in charge of IBM's insurance solutions development worldwide. She served as General Manager of Americas for Global Services. She served as Managing Partner of IBM Global Business Services and Senior Vice President of Global Business Services at IBM Global Services U.S. She served as General Manager of Insurance Industry Group. She serves on the Council on Foreign Relations, the Board of Trustees of Northwestern University and the Board of Overseers and Board of Managers of Memorial Sloan-Kettering Cancer Center. She is a Member of IBM's strategy and operations teams. She is a Leader in IBM's diversity initiatives, including the Women in Technology Council and the Women's Leadership Council and is one of the Senior Vice President Sponsors of the Women's Executive Council at IBM. She has been Director of International Business Machines Corporation (IBM) since 2012. She served as a Director at American International Group, Inc. from September 20, 2006 to May 7, 2009. She served as a Director of APQC. She is a frequent speaker at industry and business conferences around the world, the recipient of the Carl Sloane Award 2006, given by the Association of Management Consulting Firms and was named among Fortune Magazine's “50 Most Powerful Women in Business” in 2005 and 2006 and was named among Time magazine's 2002 Global Business Influential. Before joining IBM, she was with General Motors Corporation, where she was responsible for application and systems development. She is a member of the Business Roundtable, the Council on Foreign Relations, and formerly served on the President’s Export Council. U.S. Government service (former member of the President’s Export Council). Experience as a university trustee. She holds a Bachelor of Science degree with high honors in computer science and electrical engineering from the Northwestern University.

CEO Compensation
  • Ginni's compensation has been consistent with company performance over the past year.
  • Ginni's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the International Business Machines management team in years:

4.4
Average Tenure
59
Average Age
  • The tenure for the International Business Machines management team is about average.
Management Team

Ginni Rometty

TITLE
Chairman
COMPENSATION
$19M
AGE
59
TENURE
6.9 yrs

James Kavanaugh

TITLE
Senior VP & CFO
COMPENSATION
$5M
AGE
51
TENURE
0.9 yrs

John Kelly

TITLE
Senior Vice President of IBM Cognitive Solutions & IBM Research
COMPENSATION
$6M
AGE
64
TENURE
18.9 yrs

Erich Clementi

TITLE
Senior VP of IBM & Chairman of IBM Europe
COMPENSATION
$6M
AGE
60
TENURE
0.3 yrs

Martin Schroeter

TITLE
Senior VP of IBM Global Markets
COMPENSATION
$6M
AGE
54
TENURE
4.9 yrs

Martin Jetter

TITLE
Senior Vice President of IBM Global Technology Services
COMPENSATION
$9M
AGE
59

Fletcher Previn

TITLE
Chief Information Officer

Patricia Murphy

TITLE
Vice President of Investor Relations

Michelle Browdy

TITLE
Senior VP of Legal & Regulatory Affairs and General Counsel
AGE
53
TENURE
3.9 yrs

Kirill Korniliev

TITLE
Vice President of Sales and Head of The Industry Solutions Area In Central & Eastern Europe
Board of Directors Tenure

Average tenure and age of the International Business Machines board of directors in years:

10.8
Average Tenure
66
Average Age
  • The average tenure for the International Business Machines board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Ginni Rometty

TITLE
Chairman
COMPENSATION
$19M
AGE
59
TENURE
6.2 yrs

Vanitha Narayanan

TITLE
Chairman of IBM India Private Limited
TENURE
1.9 yrs

Liming Chen

TITLE
Chairman of Greater China Group
AGE
58

Michael Eskew

TITLE
Presiding Director
COMPENSATION
$500K
AGE
68

Shirley Jackson

TITLE
Independent Director
COMPENSATION
$460K
AGE
71
TENURE
13.3 yrs

Alex Gorsky

TITLE
Independent Director
COMPENSATION
$332K
AGE
58
TENURE
4.3 yrs

Ken Chenault

TITLE
Independent Director
COMPENSATION
$473K
AGE
66
TENURE
20.9 yrs

Sidney Taurel

TITLE
Independent Director
COMPENSATION
$501K
AGE
69
TENURE
17.9 yrs

James Owens

TITLE
Independent Director
COMPENSATION
$410K
AGE
71
TENURE
12.8 yrs

Andrew Liveris

TITLE
Independent Director
COMPENSATION
$380K
AGE
63
TENURE
8.8 yrs
Who owns this company?
Recent Insider Trading
  • More shares have been bought than sold by International Business Machines insiders in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
05. Nov 18 Buy Virginia Rometty Individual 02. Nov 18 02. Nov 18 8,500 $117.51 $998,835
05. Nov 18 Buy Frederick Waddell Individual 01. Nov 18 01. Nov 18 2,153 $115.99 $249,722
05. Nov 18 Buy Joseph Swedish Individual 01. Nov 18 01. Nov 18 2,000 $116.42 $232,838
02. Nov 18 Buy James Owens Individual 31. Oct 18 31. Oct 18 1,000 $114.69 $114,673
02. Nov 18 Buy Sidney Taurel Individual 31. Oct 18 31. Oct 18 4,311 $115.02 $495,846
06. Aug 18 Sell Diane Gherson Individual 03. Aug 18 03. Aug 18 -11,451 $147.00 $-1,665,219
06. Aug 18 Buy David Farr Individual 22. Jun 18 22. Jun 18 1,100 $141.46 $155,611
27. Feb 18 Sell Diane Gherson Individual 26. Feb 18 26. Feb 18 -5,000 $156.00 $-780,000
26. Feb 18 Sell Erich Clementi Individual 23. Feb 18 23. Feb 18 -13,000 $154.78 $-2,010,518
01. Feb 18 Buy Frederick Waddell Individual 31. Jan 18 31. Jan 18 610 $163.38 $99,659
X
Management checks
We assess International Business Machines's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. International Business Machines has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

External News
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Simply Wall St News

At US$119, Is It Time To Put International Business Machines Corporation (NYSE:IBM) On Your Watch List?

Let's talk about the popular International Business Machines Corporation (NYSE:IBM). … A question to answer is whether International Business Machines's current trading price of $119.34 reflective of the actual value of the? … Let’s take a look at International Business Machines’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change

Simply Wall St -

International Business Machines Corporation (NYSE:IBM): Ex-Dividend Is In 3 Days

On the 10 December 2018, International Business Machines Corporation (NYSE:IBM) will be paying shareholders an upcoming dividend amount of US$1.57 per share. … Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? … Let's take a look at International Business Machines's most recent financial data to examine its dividend characteristics in more detail.

Simply Wall St -

Does International Business Machines Corporation (NYSE:IBM)'s Capital Return Make The Cut?

and looking to gauge the potential return on investment in International Business Machines Corporation (NYSE:IBM). … To understand International Business Machines’s capital returns we will look at a useful metric called return on capital employed. … International Business Machines's Return On Capital Employed

Simply Wall St -

Does International Business Machines Corporation (NYSE:IBM) Have A Good P/E Ratio?

We'll look at International Business Machines Corporation's (NYSE:IBM) P/E ratio and reflect on what it tells us about the company's share price. … International Business Machines has a P/E ratio of 20.03, based on the last twelve months. … How Do I Calculate International Business Machines's Price To Earnings Ratio

Simply Wall St -

With An ROE Of 31%, Has International Business Machines Corporation's (NYSE:IBM) Management Done Well?

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … Our data shows International Business Machines has a return on equity of 31% for the last year. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

What Do Analysts Think About International Business Machines Corporation's (NYSE:IBM) Future?

Looking at International Business Machines Corporation's (NYSE:IBM) earnings update in June 2018, … with profits predicted to ramp up by an impressive 89.4% next year, … 5-year average growth rate of -10.3%.

Simply Wall St -

What Should Investors Know About International Business Machines Corporation's (NYSE:IBM) Return On Capital?

and looking to gauge the potential return on investment in International Business Machines Corporation (NYSE:IBM). … This share represents a portion of capital used by the company to operate the business, and it is important the company is able to use the capital base efficiently to create adequate cash flows for you as an investor. … Thus, to understand how your money can grow by investing in International Business Machines, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE)

Simply Wall St -

How Has International Business Machines Corporation's (NYSE:IBM) Earnings Fared Against The Long Term Trend

For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. … Below, I will examine International Business Machines Corporation's (NYSE:IBM) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. … See our latest analysis for International Business Machines.

Simply Wall St -

Does International Business Machines Corporation's (NYSE:IBM) PE Ratio Warrant A Buy?

The content of this article will benefit those of you who are starting to educate yourself about investing in the stock market. … and want to begin learning the link between International Business Machines Corporation (NYSE:IBM)’s fundamentals and stock market performance. … International Business Machines Corporation (NYSE:IBM) is trading with a trailing P/E of 22.8x, which is lower than the industry average of 24.6x.

Simply Wall St -

Is International Business Machines Corporation (NYSE:IBM) A Sell At Its Current PE Ratio?

largely comparable to the 24.1x average multiple of the IT? … But should this fair multiple be the final verdict of IBM’s fair valuation. … Below, I will lay out some important considerations to help determine which multiple best suits

Simply Wall St -

Company Info

Map
Description

International Business Machines Corporation operates as an integrated technology and services company worldwide. Its Cognitive Solutions segment offers Watson, a cognitive computing platform that interacts in natural language, processes big data, and learns from interactions with people and computers. This segment also offers data and analytics solutions, including analytics and data management platforms, cloud data services, enterprise social software, talent management solutions, and solutions tailored by industry; and transaction processing software that runs mission-critical systems in banking, airlines, and retail industries. The company’s Global Business Services segment offers business consulting services; delivers system integration, application management, maintenance, and support services for packaged software applications; and finance, procurement, talent and engagement, and industry-specific business process outsourcing services. Its Technology Services & Cloud Platforms segment provides cloud, project-based, outsourcing, and other managed services for enterprise IT infrastructure environments. This segment also offers technical support, and software and solution support; and integration software solutions. The company’s Systems segment offers servers for businesses, cloud service providers, and scientific computing organizations; data storage products and solutions; and z/OS, an enterprise operating system. Its Global Financing segment provides lease, installment payment plans, and loan financing services; short-term working capital financing to suppliers, distributors, and resellers; and remanufacturing and remarketing services. The company was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. International Business Machines Corporation was founded in 1911 and is headquartered in Armonk, New York.

Details
Name: International Business Machines Corporation
IBM
Exchange: NYSE
Founded: 1911
$108,964,373,862
908,793,777
Website: http://www.ibm.com
Address: International Business Machines Corporation
1 New Orchard Road,
Armonk,
New York, 10504,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE IBM Common Stock New York Stock Exchange US USD 02. Jan 1968
DB IBM Common Stock Deutsche Boerse AG DE EUR 02. Jan 1968
XTRA IBM Common Stock XETRA Trading Platform DE EUR 02. Jan 1968
LSE IBM Common Stock London Stock Exchange GB USD 02. Jan 1968
SWX IBM Common Stock SIX Swiss Exchange CH CHF 02. Jan 1968
ENXTBR IBMA Common Stock Euronext Brussels BE USD 02. Jan 1968
WBAG IBM Common Stock Wiener Boerse AG AT EUR 02. Jan 1968
SNSE IBM Common Stock Santiago Stock Exchange CL USD 02. Jan 1968
BMV IBM * Common Stock Bolsa Mexicana de Valores MX MXN 02. Jan 1968
BVL IBM Common Stock Bolsa de Valores de Lima PE USD 02. Jan 1968
BATS-CHIXE IBMZ Common Stock BATS 'Chi-X Europe' GB CHF 02. Jan 1968
BOVESPA IBMB34 BDR EA REPR 1 COM SHS Bolsa de Valores de Sao Paulo BR BRL 16. Nov 2011
BASE IBM CEDEAR 10 REP 1 COM STK USD0.2 Buenos Aires Stock Exchange AR ARS 12. Jul 2001
Number of employees
Current staff
Staff numbers
366,600
International Business Machines employees.
Industry
IT Consulting and Other Services
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2018/12/17 23:37
End of day share price update: 2018/12/17 00:00
Last estimates confirmation: 2018/12/17
Last earnings filing: 2018/10/30
Last earnings reported: 2018/09/30
Last annual earnings reported: 2017/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.