By shifting its business from hardware to software and cloud services, International Business Machines (IBM, $142.36) hopes to reverse nearly a decade of sales declines. By acquiring Red Hat in 2019, the company expanded its cloud business and has since made cloud-related services its fastest-growing division.
IBM’s June quarter results suggest that the business is making progress toward its objectives. Revenues increased 3% year over year to $18.7 billion, exceeding analysts’ expectations of $18.3 billion. In addition, IBM announced adjusted profits per share (EPS) of $2.33, compared to an average projection of $2.29 per share. The double-digit improvements Big Blue made in its cloud operations were particularly noteworthy. In 2021, the company expects full-year sales growth of $11 billion to $12 billion and adjusted free cash flow of $11 billion to $12 billion.
IBM is in the midst of spinning off Kyndryl, its $19 billion-in-sales managed infrastructure business, in order to devote more resources to its cloud business. IBM forecasts steady mid-single-digit sales growth following this divestiture.
The Dow dividend stock has historically been a big generator of free cash flow, which totaled $9.7 billion over the past 12 months, handily covering $5.8 billion in dividends. Over the same time period, IBM has paid down $6.4 billion in debt and still has $8.2 billion in cash on its balance sheet.
IBM has increased its dividend for 26 years in a row, making it one among the more recent members of the Dividend Aristocrats. It now pays a $6.56 annual dividend, yielding 4.6 percent. However, IBM wants to share the payout between the two businesses as part of the Kyndryl separation, though it’s unclear how the dividend will be split.
Based on the stock’s low 7.2 times price-to-cash flow multiple, which is an 8.8% discount to its five-year average, IBM shares appear to be undervalued.
Is IBM a good dividend stock?
Cloud software will continue to be in high demand in the coming years. IBM has a low price-to-earnings ratio of 15.93 percent and pays a 4.71 percent dividend. In 27 straight quarters, the company has exceeded earnings-per-share expectations.
Has IBM ever missed a dividend?
International Business Machines Corp is a member of the iShares S&P 1500 Index ETF (ITOT) and an underlying holding representing 1.62 percent of the SPDR S&P Dividend ETF (SDY), which has $322,667,601 in IBM shares, according to the ETF Finder at ETF Channel.
Because of these attributes, International Business Machines Corp (Symbol: IBM) made the “Dividend Channel S.A.F.E. 25” list:
A. Accelerating amount — consistent dividend increases over time; F. Flawless history — never a missed or lowered dividend; E. Enduring — at least two decades of dividend payments. S. Solid return — hefty yield and strong DividendRank characteristics; A. Accelerating amount — consistent dividend increases over time; F. Flawless history — never a missed or lowered dividend; E. Enduring — at least two decades of dividend payments.
International Business Machines Corp pays a yearly dividend of $6.56 per share, which is paid in quarterly installments. Its most recent dividend ex-date was on 11/09/2021.
The graphic below shows IBM’s long-term dividend history, which the report emphasized as critical.
Will IBM increase its dividend in 2021?
ARMONK, NEW YORK, OCT. 26, 2021 – The board of directors of IBM (NYSE: IBM) announced today a regular quarterly cash dividend of $1.64 per common share, payable on December 10, 2021 to stockholders of record on November 10, 2021.
This $1.64 per share dividend is the first to be paid by IBM following Kyndryl’s scheduled separation on November 3, 2021.
With this dividend, IBM will have paid dividends in a row for the first time since 1916.
How often is 3M dividend?
From $0.325 per share in 1989 to $5.88 per share in 2020, 3M has grown its regular dividend every year, or 10% compounded annually. When annualized, the current quarterly dividend amounts $5.92/share, for a dividend yield of 3%.
Is McDonald’s overvalued?
According to the GuruFocus Value computation, McDonald’s stock (NYSE:MCD, 30-year Financials) is moderately overvalued. GuruFocus Value represents GuruFocus’ estimation of the stock’s fair market value. It is estimated using historical stock multiples, past business growth, and analyst forecasts of future business performance. A stock’s price is far above the GF Value Line, indicating that it is overvalued and likely to underperform in the future. If it is far below the GF Value Line, on the other hand, its future return will almost certainly be higher. McDonald’s stock is thought to be somewhat overvalued at $233.86 per share and a market capitalization of $174.5 billion. The chart below shows the GF Value for McDonald’s.
What happens to my IBM stock after spinoff?
It’s understandable why IBM wants Kyndryl’s operations off its books, but it’s unclear why investors would want to invest in this new firm.
IBM’s current investors will be forced to make a decision. Following the spin-off, IBM stockholders will get new shares worth 80.1 percent of Kyndryl, while IBM will retain a holding of less than 19.9 percent and reclassify the business segment as a discontinued operation.
Within the next 12 months, IBM plans to convert all of its remaining shares in Kyndryl to debt, which doesn’t bode well for the IT spin-future. off’s
Will IBM stock holders get Kyndryl stock?
3 November 2021, ARMONK, NEW YORK – The split of IBM’s managed infrastructure services business from Kyndryl was completed today, according to IBM (NYSE: IBM). Kyndryl will begin “regular way” trading on the New York Stock Exchange under the ticker “KD” on November 4, 2021.
On October 25, 2021, the record date for the distribution, each holder of IBM common stock will receive one share of Kyndryl common stock for every five shares of IBM common stock retained. The distribution has been made in a tax-efficient way for IBM stockholders in the United States for federal income tax purposes.
“The separation of Kyndryl is one of several steps we’re doing to refine our emphasis on hybrid cloud and AI, use a portfolio that’s clearly focused on technology and consulting, and meet our growth objectives,” said Arvind Krishna, chairman and CEO of IBM. “We’re excited to continue working with Kyndryl as it grows as an independent company.”
IBM is keeping 19.9% of Kyndryl common stock, as previously announced, with the goal of swapping those shares for IBM debt over the 12-month period following the distribution, subject to market factors.
Statements in this release may comprise forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, save for historical information and conversations. The company’s current expectations about future business and financial performance are used to make forward-looking statements. These statements are subject to a variety of risks, uncertainties, and other factors that might cause actual results to differ considerably, including but not limited to: a drop in the economy and client spending budgets; a failure of the company’s innovation initiatives; harm to the company’s reputation; risks associated with investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and failure of the company to obtain necessary licenses; the possibility that the proposed separation of the company’s Global Technology Services segment’s managed infrastructure services unit will not be completed within the anticipated time period or at all, the possibility of disruption or unanticipated costs in connection with the proposed separation, or the possibility that the separation will not achieve its intended benefits; the company’s ability to successfully manage acquisitions, alliances, and dispositions, including the possibility that the proposed separation will not achieve its intended benefits; the company’s ability to successfully manage acquisitions, alliances, and dispositions Any forward-looking statement made in this release is only valid as of the day it is made. The firm assumes no commitment to update or alter any forward-looking statements unless required by law.
When are IBM dividends typically paid?
IBM pays dividends on the 10th of March, June, September, and December each year. The dividend record date is usually about a month before the dividend payment date.
Direct deposit of dividends
IBM provides registered stockholders with the option of depositing dividends directly into their bank account. Your dividend will be delivered by Electric Funds Transfer (EFT) immediately to your selected bank account on the due date if you use the Direct Deposit service. For further information on Direct Deposit or to request an enrollment form, contact Computershare (see contact details).
Dividend reinvestment
Dividend Reinvestment is a provision of the Computershare Investment Plan that allows IBM stockholders to purchase more shares in a straightforward and simple manner. To use the IBM Dividend Reinvestment option of the Computershare Investment Plan, you must be a stockholder of record.
You can authorize Computershare to reinvest all or a portion of your dividends in new IBM shares by filling out the IBM Dividend Reinvestment enrollment form (see contact details). You can either invest the entire dividend received on your IBM common stock or specify the amount of shares for which a dividend should be paid to you by check on the Form. Computershare will reinvest the dividend on the remaining shares in your account. Participants in the Dividend Reinvestment Program pay a charge of 2% of the dividend reinvested, up to a maximum of $3.00 per reinvestment.
Loss or theft of dividend payments
If you feel your dividend check has been lost or stolen, or if you haven’t received it within three days of the due date, please contact Computershare right away. A stop payment order will be put against the original check and a replacement check will be issued to you if you authorize it. The original check is no longer valid and should not be cashed if received once a dividend check has been replaced.
By contacting Computershare, you can replace a dividend check (see contact information)
Is IBM splitting into two companies?
IBM has decided on a new name for its $19 billion managed infrastructure services business, which will be split out later this year from Big Blue: Kyndryl.
Kyndryl will be situated in New York City, according to the Armonk, N.Y.-based technology behemoth, and will use a logo that features the company’s name spelled entirely in lowercase in red. The separation of the Kyndryl business, which has 4,600 clients, is anticipated to take place by the end of 2021, more than a year after the separation plan was first announced.
“In a statement, CEO Martin Schroeter stated, “Kyndryl evokes the spirit of true partnership and growth.” “Kyndryl will be known around the world as a brand that runs the important systems at the core of progress, as well as an independent firm with the best global talent in the sector.”
The name of the company was created by combining the first and second parts of the words “kinship” and “tendril.” Kinship was chosen to represent the importance of relationships with employees, customers, and partners in the new company’s strategy, while tendril was picked to represent the new company’s constant efforts to further human growth.
“In a statement, Chief Marketing Officer Maria Bartolome Winans remarked, “Creating a name is just the beginning of our journey as a brand.” “It will aid in our identification and recognition, but the meaning of the name will evolve through time as a result of our behaviors, aspirations, and activities, as well as what we empower our customers to do.”
