3 months Premium FREE
No credit card. No commitment.
International Business Machines
🇺🇸 IBM · NYSE/NASDAQ · US4592001014
Technology
USD 231.59 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
20.9
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: 231.59 ÷ 11.27 = 20.9
TTM period through: 2026-06-30
Forward P/E (estimated): 19.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 20.8
Net Debt/EBITDA (TTM)
3.5x
Latest quarter: 19.3x
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: 2026-06-30
Latest quarter (2026-06-30): 19.3x
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
34.5%
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
15.9x
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)
2.71%
TTM: 2.85%
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): 2.71%
Trailing Yield (TTM, last 12 months): 2.85%
Payout Ratio (Fwd)
60.0%
TTM: 58.8%
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): 60.0%
Payout (TTM): 58.8%
Cash Flow Payout (TTM): 42.4%
FCF Coverage (TTM): 2.21x
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 | — | 10 Aug 2027 | — | USD | 1.69 |
| Forecast* | Quarterly | — | 08 May 2027 | — | USD | 1.69 |
| Forecast* | Quarterly | — | 10 Feb 2027 | — | USD | 1.68 |
| Forecast* | Quarterly | — | 10 Nov 2026 | — | USD | 1.68 |
| Declared | Quarterly | 22 Jul 2026 | 10 Aug 2026 | 10 Sep 2026 | USD | 1.69 |
| 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 |
* Extrapolated from past dividend history. Not an official announcement — treat as an estimate, not a confirmed date or amount.
Summary
IBM generates highly reliable free cash flow, and its recent GAAP net loss was tied to a temporary, non-cash pension charge rather than fundamental deterioration. However, the combination of an elevated 20.9x valuation, a sub-3% dividend yield, and severe structural threats to its legacy mainframe moat makes it fundamentally unattractive for DGI deployment right now. Not recommended for new positions.
Sector Context
IBM operates in the Information Technology Services sector, increasingly transitioning toward hybrid cloud and AI. For DGI investors, legacy tech companies must demonstrate widening moats to offset rapid technological obsolescence, alongside disciplined capital return programs.
Temporary Opportunity Identified
Reported a Q3 2024 net loss due to a one-time, non-cash $2.7 billion pension settlement charge. However, strong underlying free cash flow and software growth remain intact.
📊 Strategy Analysis
- • Free cash flow exceptionally covers the dividend, with a strong FCF coverage ratio of 2.21x and a low cash flow payout ratio of 42.38%.
- • The recent Q3 2024 GAAP net loss is entirely attributable to a temporary, non-cash $2.7 billion pension settlement charge, not a fundamental breakdown in operating cash flow.
⚠ What to Watch
- • Valuation remains significantly elevated with a TTM P/E of 20.92, offering no margin of safety as the stock trades well above its estimated monopoly fair value bound of $202.81.
- • The dividend yield has fallen to 2.85% (below DGI targets), compounded by an anemic 5-year dividend growth CAGR of just 1.5%.
- • Faces severe structural risks to its core high-margin mainframe (IBM Z) and legacy COBOL consulting moat, as advanced AI tools threaten to accelerate legacy code modernization.
- • Elevated leverage (Net Debt/EBITDA of 3.52x) combined with massive, unresolved structural liabilities, including pension risk transfer class-action lawsuits and contested IRS audit adjustments.
📊 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: 2026-08-15
Disclaimer: This information is for educational purposes only. Not financial advice.