International Business Machines Corp. (NYSE:IBM) Consistently Returns Money to Shareholders

March 4, 2016

IBM logo
International Business Machines Corp.

Senior Vice President Peter Siphron of Siphron Capital Management says investors should still be looking at International Business Machines Corp. (NYSE:IBM), a company that continues to generate consistent profits and return money to shareholders.

Over the last two decades, IBM has been able to virtually every year buy back shares to the point of reducing the share count, which essentially benefits the existing shareholders by increasing their relative ownership.

Keep in mind that this is a seasoned technology company that has worked on switching from legacy hardware to newer software and services. That transition period is going to be bumpy. And it may not be the same exciting story that you might have with Amazon drones delivering products to your doorstep or Tesla’s Model X having doors that open above your head in a technologically innovative way, but IBM is a tried-and-true technology company that understands how to squeeze consistent profit out of relatively modest sales growth.

Peter Siphron

Siphron adds that Watson will provide possibilities for IBM’s growth and innovation in the future, as will the company’s cloud services.

Artificial intelligence is going to be part of our future, and IBM’s Watson certainly is one of the leading efforts in that field. And like Amazon, they have seen the benefit of providing cloud services. IBM has started spending considerable resources on that front to develop some good products and packages that will compete with the likes of Amazon and Microsoft, and others in the cloud-based service sector.