The IBM stock price declined slightly in June, but — ahead of the Q2 2021 earnings release — investors remain confident in the company’s ability to beat expectations.
IBM is expected to release its Q2 2021 earnings on 19 July, and investors expect 5.05% higher earnings-per-share (EPS) compared to the same period last year.
The company is over a century old and has paid a dividend since 1913. It offers integrated solutions and services globally, and it is one of the leaders in the information technology sector. IBM’s stock price is up over 19% in the past year and most of this growth (11.95%) was achieved in 2021. However, after peaking in 2013, the price has been in a bearish downtrend ever since.
Higher EPS Expected by Market Participants
The market expects EPS in Q2 2021 to reach $2.29, which is more than 5% higher than the same period last year. Out of eighteen analysts that cover the IBM stock price, ten give a neutral rating and eight give a buy rating. None has a sell rating.
IBM Is A 100-Year-Old Dividend-Paying Company
IBM was founded in 1911 and started paying a quarterly dividend in 1913. The cash dividends are usually paid on 10 March, June, September, and December, and the cash dividend payment date is usually a month after the dividend record date.
With a dividend payout ratio of 60.02% and a dividend growth history of 22 years, IBM remains one of the favourite companies for investors wanting to compound their earnings by reinvesting the cash dividend. On the flip side, YoY revenue growth is well below the sector median, currently at -3.6% compared to 8.16% last year.
IBM’s share price could return to the 2013 highs if its quarterly earnings beat expectations, especially since US equity indices are at record highs.