NYSE:IBM

Stock Analysis Report

International Business Machines

Executive Summary

International Business Machines Corporation operates as an integrated technology and services company worldwide.

Snowflake

Fundamentals

6 star dividend payer and fair value.


Similar Companies

Share Price & News

How has International Business Machines's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-6.7%

IBM

-1.8%

US IT

1.0%

US Market


1 Year Return

2.0%

IBM

20.6%

US IT

8.0%

US Market

Return vs Industry: IBM underperformed the US IT industry which returned 20.6% over the past year.

Return vs Market: IBM underperformed the US Market which returned 8% over the past year.


Shareholder returns

IBMIndustryMarket
7 Day-6.7%-1.8%1.0%
30 Day-6.6%-0.9%-0.07%
90 Day-11.8%-5.5%-1.0%
1 Year7.0%2.0%21.9%20.6%10.4%8.0%
3 Year-0.08%-11.9%93.3%85.4%46.2%36.7%
5 Year-0.6%-18.1%146.1%123.5%64.3%46.2%

Price Volatility Vs. Market

How volatile is International Business Machines's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is International Business Machines undervalued compared to its fair value and its price relative to the market?

31.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: IBM ($132.58) is trading below our estimate of fair value ($193.35)

Significantly Below Fair Value: IBM is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: IBM is good value based on its PE Ratio (15.3x) compared to the IT industry average (37.1x).

PE vs Market: IBM is good value based on its PE Ratio (15.3x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: IBM is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: IBM is overvalued based on its PB Ratio (6.5x) compared to the US IT industry average (4.3x).


Next Steps

Future Growth

How is International Business Machines forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

9.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: IBM's forecast earnings growth (9.4% per year) is above the savings rate (2.7%).

Earnings vs Market: IBM's earnings (9.4% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: IBM's earnings are forecast to grow, but not significantly.

Revenue vs Market: IBM's revenue (2.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: IBM's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: IBM's Return on Equity is forecast to be very high in 3 years time (43.9%).


Next Steps

Past Performance

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

-18.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: IBM's earnings have declined by -18.4% per year over the past 5 years.

Accelerating Growth: IBM's earnings growth over the past year (35%) exceeds its 5-year average (-18.4% per year).

Earnings vs Industry: IBM earnings growth over the past year (35%) exceeded the IT industry 9.8%.


Return on Equity

High ROE: Whilst IBM's Return on Equity (42.66%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: IBM's Return on Assets is below or equal to the IT industry average last year.


Return on Capital Employed

ROCE Improving: IBM's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is International Business Machines's financial position?


Financial Position Analysis

Short Term Liabilities: IBM's short term assets ($38.1B) exceeds its short term liabilities ($35.1B)

Long Term Liabilities: IBM's short term assets (38.1B) do not cover its long term liabilities (96.5B)


Debt to Equity History and Analysis

Debt Level: IBM's debt to equity ratio (366.5%) is considered high

Reducing Debt: IBM's debt to equity ratio has increased from 317.7% to 366.5% over the past 5 years.

Debt Coverage: IBM's debt is well covered by operating cash flow (23.3%).

Interest Coverage: IBM's interest payments on its debt are well covered by EBIT (11x coverage).


Balance Sheet

Inventory Level: IBM has a low level of unsold assets or inventory.

Debt Coverage by Assets: IBM's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

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

4.89%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.3%forecastin3Years5.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: IBM's dividend (4.89%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: IBM's dividend (4.89%) is in the top 25% of dividend payers in the US market (3.68%)

Stable Dividend: IBM's dividends per share have been stable in the past 10 years.

Growing Dividend: IBM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (73.6%), IBM's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: IBM's dividends in 3 years are forecast to be well covered by earnings (44.4% payout ratio).


Next Steps

Management

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

4.8yrs

Average management tenure


CEO

Ginni Rometty (60yo)

7.8yrs

Tenure

US$17,552,218

Compensation

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 Offi ...


CEO Compensation Analysis

Compensation vs. Market: Ginni's total compensation ($USD17.55M) is above average for companies of similar size in the US market ($USD11.18M).

Compensation vs Earnings: Ginni's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.8yrs

Average Tenure

55yo

Average Age

Experienced Management: IBM's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

7.4yrs

Average Tenure

62yo

Average Age

Experienced Board: IBM's board of directors are considered experienced (7.4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$300,97917 Jun 19
Kenneth Keverian
EntityIndividual
Shares2,227
Max PriceUS$135.15
SellUS$364,49512 Jun 19
Kenneth Keverian
EntityIndividual
Shares2,690
Max PriceUS$135.50
SellUS$274,95605 Jun 19
Kenneth Keverian
EntityIndividual
Shares2,083
Max PriceUS$132.00
SellUS$16,75808 Mar 19
Robert Del Bene
EntityIndividual
Shares123.67
Max PriceUS$135.51
SellUS$1,807,09304 Mar 19
Erich Clementi
EntityIndividual
Shares13,000
Max PriceUS$139.06
SellUS$272,99014 Feb 19
Diane Gherson
EntityIndividual
Role
Head of Human Resources
Senior VP & Chief Human Resources Officer
Shares1,989
Max PriceUS$137.25
SellUS$780,62506 Feb 19
Diane Gherson
EntityIndividual
Role
Head of Human Resources
Senior VP & Chief Human Resources Officer
Shares5,754
Max PriceUS$136.05
BuyUS$249,72205 Nov 18
Frederick Waddell
EntityIndividual
Shares2,153
Max PriceUS$115.99
BuyUS$232,83805 Nov 18
Joseph Swedish
EntityIndividual
Shares2,000
Max PriceUS$116.42
BuyUS$998,83505 Nov 18
Virginia Rometty
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares8,500
Max PriceUS$117.51
BuyUS$114,67302 Nov 18
James Owens
EntityIndividual
Shares1,000
Max PriceUS$114.69
BuyUS$495,84602 Nov 18
Sidney Taurel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares4,311
Max PriceUS$115.02

Ownership Breakdown


Management Team

  • Michelle Peluso (47yo)

    Senior VP of Digital Sales & Chief Marketing Officer

    • Tenure: 0.8yrs
  • John Kelly (65yo)

    Executive Vice President

    • Tenure: 19.8yrs
    • Compensation: US$6.42m
  • Michelle Browdy (54yo)

    Senior VP of Legal & Regulatory Affairs and General Counsel

    • Tenure: 4.8yrs
  • Ginni Rometty (60yo)

    Chairman

    • Tenure: 7.8yrs
    • Compensation: US$17.55m
  • Martin Schroeter (55yo)

    Senior VP of IBM Global Markets Global Financing

    • Tenure: 5.8yrs
    • Compensation: US$7.03m
  • James Kavanaugh (52yo)

    Senior VP & CFO

    • Tenure: 1.8yrs
    • Compensation: US$5.90m
  • Patricia Murphy

    Vice President of Investor Relations

    • Tenure: 0yrs
  • Diane Gherson (61yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 1.6yrs
  • Kevin Reardon

    Vice President of Corporate Development

    • Tenure: 0yrs
  • Fletcher Previn

    Chief Information Officer

    • Tenure: 0yrs

Board Members

  • Mike Eskew (69yo)

    Lead Director

    • Tenure: 0yrs
    • Compensation: US$564.70k
  • David Farr (64yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$378.49k
  • Sidney Taurel (70yo)

    Independent Director

    • Tenure: 18.8yrs
    • Compensation: US$547.72k
  • Shirley Jackson (72yo)

    Independent Director

    • Tenure: 14.1yrs
    • Compensation: US$511.42k
  • Andrew Liveris (64yo)

    Independent Director

    • Tenure: 9.7yrs
    • Compensation: US$420.26k
  • Alex Gorsky (59yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: US$375.90k
  • Ginni Rometty (60yo)

    Chairman

    • Tenure: 7.8yrs
    • Compensation: US$17.55m
  • Liming Chen (59yo)

    Chairman of Greater China Group

    • Tenure: 0yrs
  • Tom Rosamilia (58yo)

    Senior VP of IBM Systems & Chairman of North America

    • Tenure: 0.7yrs
  • Martin Jetter (60yo)

    Senior VP & Chairman of IBM Europe

    • Tenure: 0.8yrs
    • Compensation: US$8.51m

Company Information

International Business Machines Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: International Business Machines Corporation
  • Ticker: IBM
  • Exchange: NYSE
  • Founded: 1911
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: US$117.449b
  • Shares outstanding: 885.88m
  • Website: https://www.ibm.com

Number of Employees


Location

  • International Business Machines Corporation
  • 1 New Orchard Road
  • Armonk
  • New York
  • 10504
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
IBMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
IBMNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
IBMLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
IBMBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDJan 1968
IBM *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJan 1968
IBMSWX (SIX Swiss Exchange)YesCommon StockCHCHFJan 1968
IBMSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
IBMWBAG (Wiener Boerse AG)YesCommon StockATEURJan 1968
IBMXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
IBMAENXTBR (Euronext Brussels)YesCommon StockBEUSDJan 1968
IBMBASE (Buenos Aires Stock Exchange)CEDEAR 5 REP 1 COM STK USD0.2ARARSJul 2001
IBMB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EA REPR 1 COM SHSBRBRLNov 2011

Biography

International Business Machines Corporation operates as an integrated technology and services company worldwide. Its Cognitive Solutions segment offers a portfolio of enterprise artificial intelligence pla ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 23:38
End of Day Share Price2019/10/21 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.