New Buy IBM

22 Mar 2018 21:36

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Today’s 724 point drop in the DOW (-2.52%) triggered a limit order for International Business Machines (IBM) and represents my very first investment in Big Blue. IBM was tempting from a yield perspective in the past but held off from buying due to declining revenue. But with their latest quarterly results I see IBM starting to turn the corner with prospects of growing once again and thought it was time to finally pull the trigger and buy some shares.

IBM has been growing dividends for 22 years and at my recent buy price yields 3.9%. IBM last announced a 7.14% dividend increase in April 2017 and with April right around the corner I should get another bounce if IBM continues their annual April time frame for announcing an annual increase.

IBM is no longer a massive tech growth company but it has decent cash flow from a strong market presence and has a plan to remain relevant.


Update to my Watch List

In other news, AbbVie Inc. (ABBV) had a significant setback with their trial of lung cancer drug Rova-T. ABBV has been struggling to find a future drug to replace the massive income being generated from their hit drug Humira. While this is not the end of the world it does add some risk.

I significantly cut my buy price down to $103/share as I see risk in maintaining their current dividend growth at a double digit percentage increases over a long period of time. As such I would prefer a higher yield to offset the risk.


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