Thursday, 17 December 2015

International Business Machines

International Business Machines

Sector:  Information Technology
Beta Coefficient: 0.63
10 Yr Compound EPS Growth:  13.0%
10 Yr Compound DPS Growth: 19.5%
Dividend raises, past 10 years: 10 times.

Financial Result Year 2014

Revenues (b)     92.8
Net Income (b)   15.7
EPS  15.59
DPS   4.25
Cash flow per share 20.44
Current yield 2.7%

High Price  199.2  P/E 12.8    DY 2.1%
Low Price   150.5  P/E  9.7     DY 2.8%

IBM historically has made a broad range of computers, mainframes, and network servers.  

But the company has morphed over the years into a software and services company.

As a consequence, fewer folks than ever talk about an "IBM computer" anymore; they talk about an "IBM business solution" or some such.

IBM is divided into four principal business units and a financing unit:

  • The Global Technology Services unit:  This is the largest, at 38% of revenues.
  • The Global Business Services unit (18%)
  • The Software unit (32%).
  • The Systems and Technology group (10%)
  • The Financing Unit (2%) helps the company market it all.

Overseas sales make up about 55% of revenues.

The company has kept "strategic" large systems but little else; it is now offering cloud-based and integrated hardware/software/service solutions for diverse needs such as business analytics and data security.

It recently invested $4 billion in "new" core strategic areas in cloud and mobile computing, analytics and information security.

It is buying up its own stock, almost 6% of its float last year.

Its business mix is shifting from less profitable hardware to more profitable services, first came consulting, then outsourcing and now, leading-edge analytics, security and cloud services.

Stock Performance Chart for International Business Machines Corporation

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