2. International Business Machines Corporation (NYSE:IBM)
Dividend Yield as of August 22: 4.77%
International Business Machines Corporation (NYSE:IBM) is a New York-based technology company that provides related services to its consumers. In August, Credit Suisse initiated its coverage of the stock with an Outperform rating and a $163 price target, highlighting the historical outperformance of the IT hardware sector during recessionary periods due to its strong balance sheets and steady cash flows.
In Q2 2022, International Business Machines Corporation (NYSE:IBM) reported strong results, posting revenue of $15.5 billion, up 9.3% from the same period last year. The company’s cash generation remained strong in the first half of 2022, with net cash from operating activities standing at $4.6 billion. Its free cash flow came in at $3.3 billion and paid $1.5 billion in dividends to shareholders, reflecting secure dividend payments.
International Business Machines Corporation (NYSE:IBM) currently pays a quarterly dividend of $1.65 per share and has a dividend yield of 4.77%, as of August 22. The company maintains a 27-year track record of dividend growth.
At the end of Q2 2022, 40 hedge funds tracked by Insider Monkey owned investments in International Business Machines Corporation (NYSE:IBM), valued at over $948.3 million.
St. James Investment Company mentioned International Business Machines Corporation (NYSE:IBM) in its Q4 2021 investor letter. Here is what the firm had to say:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
