Dow Jones Stocks to Sell: International Business Machines (IBM)
International Business Machines (IBM) is as stodgy as the PC character in those famous Mac commercials. Unimaginative, non-innovating, plodding.
Yes, IBM stock happens to be reasonably valued at 9 times forward earnings on 9% long-term EPS growth, but a lot of that earnings growth comes on the “per share” side thanks to buybacks.
I think IBM stock has been living off its legacy, and IBM stock is one of those companies that gets hired simply because of the safe name, which means whoever in senior management makes that call, he knows he won’t lose his job. But look, revenue has been as flat as a yeastless pancake. In Q4, revenue actually fell 5%.
Ask yourself this: Are there other companies where you can earn a 2.1% yield that are actually growing revenues? The answer is a vehement “yes.”
Just about any hotel REIT is the place to start. Buh-bye, IBM stock.