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

2.3%

NYSE:IBM

4.4%

US IT

2.9%

US Market


1 Year Return

-7.6%

NYSE:IBM

22.8%

US IT

0.2%

US Market

IBM underperformed the IT industry which returned 21.7% over the past year.

IBM underperformed the Market in United States of America which returned -0.7% over the past year.


Share holder returns

IBMIndustryMarket
7 Day2.3%4.4%2.9%
30 Day-10.3%-0.5%-2.3%
90 Day1.4%9.8%3.1%
1 Year-3.0%-7.6%24.1%22.8%2.4%0.2%
3 Year-4.2%-15.6%102.5%93.9%41.7%32.4%
5 Year-15.2%-30.2%143.9%119.1%55.1%37.9%

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 based on future cash flows and its price relative to the stock market?

37%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

International Business Machines's share price is below the future cash flow value, and 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 Based on Earnings

International Business Machines is good value based on earnings compared to the US IT industry average.

International Business Machines is good value based on earnings compared to the United States of America market.


Price Based on Expected Growth

International Business Machines is poor value based on expected growth next year.


Price Based on Value of Assets

International Business Machines is overvalued based on assets compared to the US IT industry average.


Next Steps

Future Growth

How is International Business Machines expected to perform in the next 1 to 3 years based on estimates from 18 analysts?

5.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

International Business Machines's revenue is expected to grow by 3% yearly, however this is not considered high growth (20% yearly).

International Business Machines's earnings are expected to grow by 5.7% yearly, however this is not considered high growth (20% yearly).

International Business Machines's revenue growth is positive but not above the United States of America market average.

International Business Machines's earnings growth is positive but not above the United States of America market average.

International Business Machines's earnings growth is expected to exceed the low risk savings rate of 2.7%.


Earnings per Share Growth Estimates


Future Return on Equity

International Business Machines is expected to make outstanding use of shareholders’ funds in the future (Return on Equity greater than 40%).


Next Steps

Past Performance

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

-18.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

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 exceeds its 5-year average (51.9% vs -18.9%)

International Business Machines's earnings growth has exceeded the US IT industry average in the past year (51.9% vs 9.8%).


Return on Equity

Whilst International Business Machines made outstanding use of shareholders’ funds last year (Return on Equity greater than 40%), this is metric is skewed due to its high level of debt.


Return on Assets

International Business Machines used its assets more efficiently than the US IT industry average last year based on Return on Assets.


Return on Capital Employed

International Business Machines's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is International Business Machines's financial position?


Financial Position Analysis

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.


Debt to Equity History and Analysis

International Business Machines's level of debt (410.9%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (265.8% vs 410.9% today).

Debt is well covered by operating cash flow (22%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 21.9x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 1.1x debt.


Next Steps

Dividend

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

4.94%

Expected Dividend Yield


Dividend Yield and Payments Analysis

International Business Machines's pays a higher dividend yield than the bottom 25% of dividend payers in United States of America (1.49%).

International Business Machines's dividend is above the markets top 25% of dividend payers in United States of America (3.85%).

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

Dividends paid are covered by earnings (1.5x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (2.3x coverage).


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?

4.6yrs

Average management tenure


CEO

Ginni Rometty (60yo)

7.6yrs

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

Ginni's remuneration is higher than average for companies of similar size in United States of America.

Ginni's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

4.6yrs

Average Tenure

55yo

Average Age

The tenure for the International Business Machines management team is about average.


Board Age and Tenure

7.2yrs

Average Tenure

62yo

Average Age

The tenure for the International Business Machines board of directors is about average.


Insider Trading

International Business Machines individual insiders have only sold shares 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: 0.6yrs
  • John Kelly (65yo)

    Executive Vice President

    • Tenure: 19.6yrs
    • Compensation: US$6.42m
  • Michelle Browdy (54yo)

    Senior VP of Legal & Regulatory Affairs and General Counsel

    • Tenure: 4.6yrs
  • Ginni Rometty (60yo)

    Chairman

    • Tenure: 7.6yrs
    • Compensation: US$17.55m
  • Martin Schroeter (55yo)

    Senior VP of IBM Global Markets Global Financing

    • Tenure: 5.6yrs
    • Compensation: US$7.03m
  • James Kavanaugh (52yo)

    Senior VP & CFO

    • Tenure: 1.6yrs
    • Compensation: US$5.90m
  • Patricia Murphy

    Vice President of Investor Relations

    • Tenure: 0.0yrs
  • Diane Gherson (61yo)

    Senior VP & Chief Human Resources Officer

    • Tenure: 1.4yrs
  • Kevin Reardon

    Vice President of Corporate Development

    • Tenure: 0.0yrs
  • Fletcher Previn

    Chief Information Officer

    • Tenure: 0.0yrs

Board Members

  • Mike Eskew (69yo)

    Lead Director

    • Tenure: 0.0yrs
    • Compensation: US$564.70k
  • David Farr (64yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$378.49k
  • Sidney Taurel (70yo)

    Independent Director

    • Tenure: 18.6yrs
    • Compensation: US$547.72k
  • Shirley Jackson (72yo)

    Independent Director

    • Tenure: 13.9yrs
    • Compensation: US$511.42k
  • Andrew Liveris (64yo)

    Independent Director

    • Tenure: 9.5yrs
    • Compensation: US$420.26k
  • Alex Gorsky (59yo)

    Independent Director

    • Tenure: 4.9yrs
    • Compensation: US$375.90k
  • Ginni Rometty (60yo)

    Chairman

    • Tenure: 7.6yrs
    • Compensation: US$17.55m
  • Liming Chen (59yo)

    Chairman of Greater China Group

    • Tenure: 0.0yrs
  • Tom Rosamilia (58yo)

    Senior VP of IBM Systems & Chairman of North America

    • Tenure: 0.5yrs
  • Martin Jetter (60yo)

    Senior VP & Chairman of IBM Europe

    • Tenure: 0.6yrs
    • 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$118.929b
  • 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
IBMWBAG (Wiener Boerse AG)YesCommon StockATEURJan 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
IBMDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
IBM-UETLX (Eurotlx)YesCommon StockITEURJan 1968
IBMXTRA (XETRA Trading Platform)YesCommon StockDEEURJan 1968
IBMSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJan 1968
IBMZBATS-CHIXE (BATS 'Chi-X Europe')YesCommon StockGBCHFJan 1968
IBMAENXTBR (Euronext Brussels)YesCommon StockBEUSDJan 1968
IBMBASE (Buenos Aires Stock Exchange)CEDEAR 10 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 Analysis2019/08/21 23:39
End of Day Share Price2019/08/21 00:00
Earnings2019/06/30
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.