Dividend Overview
Dividend Yield
2.70%
Dividend / Share
$6.69
International Business Machines Corp
Exchange: NYSESector: TechnologyIndustry: Information Technology Services
International Business Machines Corporation (IBM) is an information technology (IT) company. IBM operates in five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology and Global Financing. GTS primarily provides IT infrastructure services and business process services. GBS provides professional services and application management services. Software consists primarily of middleware and operating systems software. Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. In October 2013, International Business Machines Corporation acquired Xtify Inc. In October 2013, the Company announced that it has completed the acquisition of The Now Factory, a privately held provider of analytics software that helps communications service providers (CSPs) deliver better customer experiences and drive new revenue opportunities.
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Trading 35% above its estimated fair value of $161.31.
Current Price
$248.16
+2.06%GoodMoat Value
$161.31
35.0% overvaluedProfile
Valuation (TTM)
Market Cap$231.96B
P/E21.90
EV$275.02B
P/B7.10
Shares Out934.74M
P/Sales3.43
Revenue$67.53B
EV/EBITDA15.88
International Business Machines Corp (IBM) Dividends
GoodMoat Analysis
IBM's dividend profile is a mixed bag for an income-focused value investor. The 2.77% yield is modest, but the payout appears sustainable based on a reasonable FCF payout ratio. However, the high debt level and modest growth profile warrant caution.
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IBM's dividend yield of 2.77% is modest compared to the broader market but is supported by a long history. The key sustainability metric, the free cash flow payout ratio, is favourable. With a Free Cash Flow Yield of 5.1%, the dividend consumes roughly half of the company's annual FCF, providing a reasonable cushion. The dividend is also growing, albeit slowly, as evidenced by the company's history of increases. From a quality perspective, the strong Free Cash Flow generation is a positive indicator, aligning with the framework's preference for high FCF conversion. However, the balance sheet is a significant concern. A Debt/Equity ratio of 1.98 is high and exceeds the framework's favourable threshold of Debt/EBITDA < 1.0x, indicating elevated financial leverage that could pressure the dividend during economic stress. While the current payout is covered by cash flow, the company's modest revenue growth of 12.2% YoY suggests future dividend growth may be limited. For an income investor, the dividend appears secure in the near term, but the high debt load introduces risk that must be monitored closely. Analysis based on data as of 2024-05-15.
Key Metrics
Market Cap
$231.96B
P/E Ratio
21.90
Forward P/E
—
EPS
$11.16
PEG Ratio
0.24
Book Value
$34.93
Dividend Yield
2.70%
Profit Margin
15.69%
ROE
32.45%
Dividend History
Dividend Safety
IBM Dividend Analysis
International Business Machines Corp (IBM) dividend analysis including yield, payout history, and sustainability metrics. The current dividend yield is 2.70%. The annual dividend per share is $6.69.
P/E ratio: 21.90. Profit margin: 15.69%. Free cash flow: $11.58B. This page shows International Business Machines Corp's dividend overview, key metrics, historical payout data, and dividend safety assessment to help income-focused investors evaluate the sustainability of dividend payments.
GoodMoat's dividend analyzer evaluates payout ratios, earnings coverage, and free cash flow coverage to determine how well supported International Business Machines Corp's dividend payments are. Use this analysis alongside the company's financial statements and quality score to make informed income-investing decisions.