IBM prospers in the cloud

Article Excerpt

IBM, $132.34, is still a buy. The company (New York symbol IBM; Shares o/s: 903.2 million; Market cap: $119.1 billion; TSINetwork Rating: Above Average; Dividend yield: 5.0%) is one of the world’s largest computing firms, with operations in over 175 countries. IBM’s revenue in the three months ended June 30, 2022, rose 9.3%, to $15.54 billion from $14.22 billion a year earlier. Strong growth at its cloud computing business offset the effects of a higher U.S. dollar. Excluding unusual items, overall earnings jumped 44.6%, to $2.11 billion from $1.46 billion. Due to more shares outstanding, per-share earnings improved at a slower pace of 43.5%, to $2.31 from $1.61. That beat the consensus estimate of $2.27. The company will likely earn $9.43 a share in 2022, and the stock trades at a low 14.0 times that estimate. The p/e is low, especially considering IBM spends a high 11% of its revenue on research. The shares yield a high 5.0%. IBM remains a buy. buy…

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