IBM looks like a bargain

Article Excerpt

IBM, $164.43, is still a buy. The company (New York symbol IBM; Shares outstanding: 918.6 million; Market cap: $151.1 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%) has shifted its focus in the past few years to its more-profitable cloud computing, consulting and mainframe businesses. In the three months ended March 31, 2024, revenue rose 1.5%, to $14.46 billion from $14.25 billion a year earlier. Earnings excluding one-time items gained 25.2%, to $1.56 billion from $1.25 billion. Due to more shares outstanding, per-share earnings rose at a slower pace of 23.5%, to $1.68 from $1.36. The higher earnings growth is largely due to a plan to improve productivity. The stock trades at 16.6 times IBM’s projected 2024 earnings of $9.92 a share. That’s a low p/e considering IBM continues to earmark a high 12% of its revenue to research and is adding artificial intelligence features to its software products. The $6.64 dividend yields 4.1%. IBM remains a buy. buy. …