IBM

IBM Increases Dividend; Annual Yield Still Not That Attractive

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On Tuesday, IBM () boosted its dividend 13%, and we continue to expect double-digit growth in its payout in coming years. However, we like the dividend profiles of a few of its tech peers better, namely Microsoft (MSFT) and Intel (INTC). << About our Dividend Growth Newsletter — BusinessWire (April 24) “The IBM (IBM) board of directors today declared a regular quarterly cash dividend of $0.85 per common share, payable June 9, 2012 to stockholders of record May 10, 2012. Today’s dividend declaration represents an increase of $0.10, or 13 percent higher than the prior quarterly dividend of $0.75 per common share. This is the 17th year in a row that IBM has increased its quarterly cash dividend, and the … Read more

IBM Raises Full-Year Earnings Guidance; 1Q Beat Due to Lower Quality Drivers; Services Backlog Falls

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International Business Machines () posted mixed first-quarter results after the close Tuesday. Though the firm showed material bottom-line expansion, the firm’s top-line growth was relatively modest and its services backlog fell before adjusting for a favorable impact from currency. We are sticking with our fair value estimate for the company. Revenue was essentially flat from the same period a year ago as software, services and a doubling of cloud-based revenue helped offset a stiff decline in hardware sales. We were pleased to see the strength in software revenue (up 5%), but we’re slightly disappointed in the company’s services business, where revenue edged up just 1% and services backlog declined 2% before adjusting for currency. We’ll be keeping this important, “yellow flag” data … Read more

IBM Posts Solid Fourth-Quarter Results; Software Continues to Drive Performance

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IBM (IBM) reported fourth-quarter results Wednesday that capped off a year of record earnings per share, revenue, profit and free cash flow. We continue to like IBM, but we are waiting for an entry point that captures an appropriate margin of safety before adding it to either our Best Ideas Newsletter or Dividend Growth Newsletter.  The firm’s revenue jumped a modest 2% (1% adjusting for currency) as an 8% decline in sales from Systems and Technology–due to the timing of product launches, namely the System z mainframe server–weighed down strong performance in Software, which advanced 9% due to strength in its middleware product suite (WebSpere, Tivoli, etc.). Geographically, sales in the Americas’ region increased 3%, while revenues from Europe/Middle East/Africa advanced 1%. … Read more

IBM’s Third-Quarter Results Fail to Impress, Though Earnings Growth Remains Solid

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IBM reported mixed third-quarter results Monday that showed strong earnings expansion but relatively weak top line growth. We had been expecting such performance and are maintaining our fair value estimate. IBM’s revenue nudged up 3% (8% including currency) thanks to growth in cloud-revenue (which has doubled year-to-date from last year’s levels), software (up 8% constant currency), and in regions it considers to be growth markets (up 13% constant currency). Software revenue was aided by strength in the firm’s middleware products—WebSphere (up over 50%), Information Management (up 12%), and Tivoli (up 8%). Sales in BRIC countries—Brazil, Russia, India, China—increased 13%, matching aggregrate growth-market expansion. Services revenue, adjusted for currency, nudged higher 2%, and backlog related to the segment improved $2.4 billion, … Read more

Ignore Debt Ceiling News, Focus on Corporate Earnings

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Simply put, the United States is not going to default on its debt. In other words, we think any market action resulting from the debt-ceiling issue will be irrelevant in coming months, and resolve itself in due time — as it has with any other crisis. Further, we remain unconvinced that this topic is a legitimate concern for long-term equity investors. The fact that America has a large national debt (and a problem with entitlement programs) is well documented in every history and social-studies textbook in grammar schools across the country; how can this be something that will blindside the markets? We’re not talking about derivatives on complex mortgage instruments here. The debt-ceiling deadline is purely a political issue, one … Read more

IBM Puts up Fantastic Second-Quarter Results

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International Business Machines (IBM) posted strong second-quarter results Monday. The firm’s top-line increased 12% (5% adjusting for currency), while net income advanced 8% from the same period a year ago. The firm indicated that hardware, software and services revenue grew at a double-digit pace, and the company raised its full year 2011 operating earnings per share guidance to at least $13.25 from at least $13.15 previously. Revenue from markets IBM categorizes as growth now represent about 22% of its top line, with particular strength from the BRIC countries – Brazil, Russia, India, and China – which advanced over 20% in the period. The firm’s services revenue continued at a nice pace of expansion, with backlog jumping $15 billion from the … Read more

SEC Approves Financial Weapon of Mass Destruction and More Earnings Reports

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Let’s talk about quadruple-leveraged ETFs, Apple’s and Altria’s earnings reports, Coach’s fundamental improvement, Gilead’s fall from grace, IBM’s ongoing deterioration and more. By Brian Nelson, CFA Well, it is what it is as they say. In our ETF research and analysis, we consistently warn readers about the long-term price erosion dynamics of ultra-leveraged ETFs (of the double and triple variety), vehicles that we have emphasized are for “day traders,” not long-term investors. Believe it or not, however — we received news May 3 that the SEC approved a request to now list quadruple-leveraged ETFs, what we describe to be “financial weapons of mass destruction.” Yikes. You read that correctly–quadruple-leveraged exchange traded funds, ones that mimic the movement of the index … Read more

Dividend Increases/Decreases for the Week Ending May 3

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Below we provide a list of firms that raised their dividends during the week ending May 3. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Alexander & Baldwin (ALEX): now $0.165 per share quarterly dividend, was $0.145. American Campus Communities (ACC): now $0.47 per share quarterly dividend, was $0.46. Ames National Corporation (ATLO): now $0.24 per share quarterly dividend, was $0.23. Apple (AAPL): now $0.77 per share quarterly dividend, was $0.73. BP Midstream Partners (BPMP): now $0.3126 per share quarterly dividend, was $0.3015. Cal-Maine Foods (CALM): now $0.272 per share quarterly … Read more

Governance: The G in ESG Investing

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By Valuentum Analysts No discussion of ESG investing would be complete without addressing the role of corporate governance (“stewardship”) in equity investing. As with the other aspects of ESG investing, corporate governance covers a lot of ground. It can include pretty much anything related to how a company is run, including leadership, executive compensation, audits and accounting, and shareholder rights. These areas are just the tip of the iceberg, however.  A company with good corporate governance is one that is run well with the proper incentives and with all stakeholders in mind, from employees to suppliers to customers to shareholders and beyond. Good corporate governance practices decrease the risk to investors as it cuts through conflicts of interest, misuse of … Read more

Which Sectors Are Leading the Market Higher? And Why Is This Important?

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Missed the ’13 Most Important Steps to Understand the Stock Market’? Click here. Demand academic evidence regarding the efficacy of the Valuentum process? Click here. Tobias J. Moskowitz and Mark Grinblatt documented the “strong and prevalent momentum effect in industry components of stock returns which accounts for much of the individual stock momentum anomaly” in their scholarly article published in the Journal of Finance, ‘Do Industries Explain Momentum’ (download here; stable link here; updated by Fraulo and Nguyen here). Moskowitz and Grinblatt also concluded that “industry momentum investment strategies, which buy stocks from past winning industries and sell stocks from past losing industries, appear highly profitable.” Such findings are consistent with the ‘Case for the Valuentum Style of Investing,’ and … Read more