Another quarter, another familiar result for International Business Machines Corporation (IBM). Even though IBM released better-than-expected quarterly earnings, the stock fell 4% anyway. Shareholders have seen this movie before -- IBM stock is essentially flat over the past three years, woefully under-performing the S&P 500 in that time.
But underneath the pervasive negativity, IBM is doing a lot of things right. The new growth businesses, collectively termed the "strategic initiatives," are growing at a high rate, and will soon account for more than half of the business. And, IBM still generates over $12 billion of free cash flow each year, which can be used for continued investment, as well as share buybacks and dividends.
IBM has increased its dividend each year, for the past 22 years. It is a Dividend Achiever, a group of stocks with 10+ consecutive years of dividend increases. You can see the entire list of all 262 Dividend Achievers here.
IBM has a long history of reinventing itself. With an operating history of over 100 years, and a 3%+ dividend yield, IBM has earned a place on our list of "blue-chip" stocks. There are only a few dozen stocks that meet these requirements. You can see our full list of blue-chip stocks here.
