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Does anybody advocate for IBM?
#1
IBM is a stock that I used to have years ago, and has seen better days.  Its price has declined now for 10 years straight, though it is now trying to reinvent itself as a Cloud company.  The dividend is really nice; 5.1%.  The P/E ratio is a very solid 20.  I haven't seen anyone mention it so far, so I thought I'd ask if anybody has it or intends to add more.
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#2
Value trap as far as I'm concerned. 

No interest from me until I see several quarters of revenue/EPS growth again.
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#3
Sitting on 20 shares of IBM. Won't add anymore to it unless like Eric said it shows a few quarters of revenue growth.
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#4
No interest at all. They were disrupted 40+ years ago and never recovered. Lots of plans that never worked out. A behemoth to turn around. It's worse than a bad sign when any stock has stagnated during ten years of this bull market. Huge opportunity cost of holding it.
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#5
That's more or less what I thought. Funny story. About 10-15 years ago, give or take, my company had a fierce competitor (I forget the name). One day they got bought up by IBM. Our CEO said in the next company meeting that this was the greatest thing that could have happened, because now we'll never hear from them again. And he was right.
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#6
They had a great run for decades of course. They decided nobody would want a computer on their desk at home. Smile They tried to play catch up but it was too late as 10+ major PC/software manufacturers invaded. Crashed with everything else in the tech bubble. They had a decent run after the financial crisis and that was it. They have tried some M&A. If you can't run a huge business and grow it organically, the merger thing usually goes bad. Similar story for other large companies that were once revered. GE,T,PFE etc. in decades long struggles. Paying a good dividend (until they don't), because nobody would stick around otherwise. I don't know if IBM has done many spin offs yet but that might be next if they don't get things working before the next recession. Sometimes just getting much smaller is the last attempt at doing something beyond surviving.
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#7
I'm confused. Why is a P/E of 20 "solid" for a company that's decreased EPS over 14% annually for the last 5 years, a payout ratio over 100% and has a debt to equity ratio of over 3x? I get that it looks a little better when you consider price to cash flow but I don't think there's much else to recommend it. I'm not even sure T has underwhelmed that badly.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#8
(03-10-2021, 06:38 PM)Dividend Watcher Wrote: I'm confused. Why is a P/E  of 20 "solid" for a company that's decreased EPS over 14% annually for the last 5 years, a payout ratio over 100% and has a debt to equity ratio of over 3x? I get that it looks a little better when you consider price to cash flow but I don't think there's much else to recommend it. I'm not even sure T has underwhelmed that badly.

Somebody needs to learn to be a little more patient.   Big Grin

Seriously though, they are scared to cut the dividend in half when they clearly should.  This is exactly how people get sucked into a former famous brand value trap.  I'll just drip that dividend for 67 years and all will be well.

Ken, remember this when you shop for your first utility too. We have charts for days demonstrating how much better off you aren't buying a no growth 4%+ yielding UTE over one that grows at 5-7%, (both earnings and dividends).
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