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International Business Machines
🇺🇸 IBM · NYSE/NASDAQ · US4592001014
Technology
USD 287.88 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
25.4
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 287.88 ÷ 11.31 = 25.4
TTM period through: 2026-03-31
Forward P/E (estimated): 23.1
Based on analyst estimates
Reference: Provider P/E (Trailing): 25.6
Net Debt/EBITDA (TTM)
3.3x
Latest quarter: 18.5x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-03-31
Latest quarter (2026-03-31): 18.5x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
ROE
35.8%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
18.6x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Dividend Summary
Powered by EODHDDividend Yield (Fwd)
2.35%
TTM: 2.35%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Forward Yield (estimated): 2.35%
Trailing Yield (TTM, last 12 months): 2.35%
Payout Ratio (Fwd)
59.8%
TTM: 58.4%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (Fwd): 59.8%
Payout (TTM): 58.4%
Cash Flow Payout (TTM): 44.9%
FCF Coverage (TTM): 2.08x
Growth Streak
8 yrs
Consec. increases
Div. Growth (5Y)
1.5%
Dividend History
EODHD Dividends API| Status | Type | Decl. Date | Ex-Div Date | Pay Date | Currency | Amount |
|---|---|---|---|---|---|---|
| Forecast* | Quarterly | — | 08 May 2027 | — | USD | 1.69 |
| Forecast* | Quarterly | — | 10 Feb 2027 | — | USD | 1.68 |
| Forecast* | Quarterly | — | 10 Nov 2026 | — | USD | 1.68 |
| Forecast* | Quarterly | — | 08 Aug 2026 | — | USD | 1.68 |
| Paid | Quarterly | 22 Apr 2026 | 08 May 2026 | 10 Jun 2026 | USD | 1.69 |
| Paid | Quarterly | 28 Jan 2026 | 10 Feb 2026 | 10 Mar 2026 | USD | 1.68 |
| Paid | Quarterly | 22 Oct 2025 | 10 Nov 2025 | 10 Dec 2025 | USD | 1.68 |
| Paid | Quarterly | 23 Jul 2025 | 08 Aug 2025 | 10 Sep 2025 | USD | 1.68 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
IBM generates reliable free cash flow and its recent GAAP loss was tied to a temporary, non-cash pension charge rather than fundamental business deterioration. However, the combination of a sub-3% dividend yield, an elevated valuation (P/E over 25x), and long-term structural threats to its legacy mainframe ecosystem make it unsuitable for conservative dividend portfolios. Better opportunities exist in higher-yielding, predictably stable essential service sectors.
Sector Context
International Business Machines (IBM) provides global enterprise IT services, hybrid cloud infrastructure, and proprietary mainframe systems. While mission-critical B2B technology with high switching costs can sometimes fit dividend strategies, rapid technological shifts and AI-driven obsolescence risks make the broader sector highly challenging for conservative, 'forever' income investing.
Temporary Opportunity Identified
Q3 2024 GAAP earnings were temporarily depressed by a $2.7 billion one-time, non-cash pension settlement charge.
📊 Strategy Analysis
- • Free cash flow comfortably covers the dividend, with a safe cash flow payout ratio of 44.9%.
- • The recent GAAP net loss in Q3 2024 was driven by a one-time, non-cash pension settlement charge rather than underlying operational weakness.
⚠ What to Watch
- • Current dividend yield of 2.35% falls well below the strategy's strict 3.0% minimum threshold.
- • Valuation multiples are significantly elevated, with a TTM P/E of 25.45 pricing the stock far above the target 8-15x value range.
- • The company faces critical long-term structural risks from advanced AI models capable of autonomously refactoring legacy COBOL code, which threatens to erode its highly profitable mainframe and consulting moat.
- • Net Debt/EBITDA of 3.29x sits in the caution zone, alongside unresolved multi-billion dollar litigation regarding pension risk transfers.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-07-04
Disclaimer: This information is for educational purposes only. Not financial advice.