August 4, 2021
It sounds silly to call one of the oldest blue chips a “next great dividend play”, but given its recent history it feels appropriate. You might have almost forgotten about it, but IBM has been on a rally ever since its last quarterly earnings update. The real play here is to make the computer giant an income piece. The first big reason to go after IBM is its growing cloud-based computing, which has continued to grow at a double-digit pace giving good prospects for the future. The next reason for the IBM dividend pay is the cash flow. They already have generated $2.56 billion in free cash flow more than covering their shareholder dividends of $1.47 billion, and they have made structural changes to bolster finances moving forward. Finally, most tech giants have wonderful balance sheets but for IBM that isn’t the case. The good news is they are making tremendous progress as they reduced liabilities by $6.3 billion this year.
FINSUM + Magnifi: IBM doesn’t make sense as a wonderful growth opportunity but it does make a smart
dividend play in the second half of 2021.
Magnifi is changing the way we shop for investments, with the world’s first semantic search engine for finance that helps users discover, compare and buy investment products such as ETFs, mutual funds and stocks. As of August 2021, 500,000+ users with $569+ billion in Assets Under Influence, have used Magnifi over 14,000,000 times. Try it for yourself today.
This blog is sponsored by Magnifi. The information and data are as of the publish date unless otherwise noted and subject to change. This material is provided for informational purposes only and should not be construed as individualized investment advice or an offer or solicitation to buy or sell securities tailored to your needs. This information covers investment and market activity, industry or sector trends, or other broad-based economic or market conditions and should not be construed as investment research or advice. Investors are urged to consult with their financial advisors before buying or selling any securities. Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. Past performance is no guarantee of future results. This content may not be reproduced or distributed to any person in whole or in part without the prior written consent of Magnifi. [As a technology company, Magnifi provides access to tools and will be compensated for providing such access. Magnifi does not provide brokerage or custody services.]