Entering text into the input field will update the search result below

IBM: Income Play With Very Poor Total Return

William Stamm profile picture
William Stamm


  • IBM has increased its dividend for 10 of the last 10 years, with a present yield of 3.9% well above average.
  • Its return underperformed the Dow average for my 54-month test period by 69.92%.
  • IBM was once a great company but has been slow to keep up with the changes in computer software and application technology.

This article is about International Business Machines (NYSE:IBM) and why it's a buy for the income investor who thinks it will grow in the next year. This is a technology company. I have had comments in previous articles about why I compare performance to the Dow average. I use the Dow average for performance comparison because six of the companies in the Good Business Portfolio are in the Dow, and they got there by being good businesses that make money in good and bad times. So, I will look at some other Dow companies and see if they perform well enough to add to my portfolio. The seventh name is IBM, and it's an avoid for the total return investor. This study has come up with one great company, 3M (MMM), and another which has fair potential, Intel (INTC). The others were poor investments for me, using my Good Business Portfolio Guidelines.

Fundamentals of IBM will be reviewed in the following topics below: The Good Business Portfolio Guidelines, Total Return and Yearly Dividend, Last Quarter's Earnings, Company Business and Takeaways And Recent Portfolio Changes.

I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am taking a look at. For a complete set of the guidelines, please see my article "The Good Business Portfolio: Update To Guidelines and July 2016 Performance Review". These guidelines provide me with a balanced portfolio of income, defensive, total return and growing companies that hopefully keeps me ahead of the Dow average.

Good Business Portfolio Guidelines

IBM passes 8 of 11 Good Business Portfolio Guidelines, a poor score (a good score is 10 or 11). These guidelines are only used to filter companies to be considered in the

This article was written by

William Stamm profile picture
BSEE The Cooper Union, school of engineering 1966. Engineering manager Harris corp. 23 years Software development, Grumman Corp 10 years as project manager.26 years managing my own IRA accounts, in retirement now with a CAGR of 10.98%

Analyst’s Disclosure: I am/we are long BA, JNJ, HD, OHI, MO, HOG, IR, TXN, DLR, PEP, INTC. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.