IBM Stock – Flat Sales, But Some Potential

International Business Machines (IBM) dates back to 1911 and has been a major player in information technology for the century-plus since. Of course, IBM’s focus has changed from primarily a hardware vendor to include software and service as key components to its overall business strategy. IBM’s focus on innovation has also stood the test of time, having been awarded 6,809 patents in 2013, more than any other company for the 21st consecutive year.

If IBM significantly increased its dividend, that might drive the stock price higher (as the market likely would rationalize the yield in comparison to IBM’s stock price). However, I would not look for IBM to raise dividends until the results of its move to the cloud become more prominent on the company’s financials. Instead of raising dividends, IBM might choose to deploy that capital to capture market share and grow its cloud infrastructure over the short- to mid-term periods. Hopefully that would spur revenue growth. But don’t necessarily bank on it.

Source: InvestorPlace

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