DGI For The DIY

[EricL]

I feel IBM is a core holding in my portfolio and based on its track record over the last twenty years it looks like a bargain to me at current levels. Revenue growth has slowed recently but between stock buybacks and growing higher margin parts of the business the earnings are projected to grow 10% per year over the next 5 years. With a current PE of just 11, I think its a great value.

Here are the historical growth rates over a few periods (numbers from fastgraphs).
20YR EPS = 20.2%
20YR DG = 9.0%

15YR EPS = 11.2%
15YR DG = 15.7%

10YR EPS = 13.9%
10YR DG = 19.2%

5YR EPS = 15.1%
5YR DG = 17.2%

With earnings expected to grow at 10% going forward and dividends likely to as well, I think the stock will do fine over the long run.