How to buy IBM shares | $120.51
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International Business Machines Corporation is an information technology services business with stocks listed in the US. IBM shares (IBM) are listed on the NYSE and all prices are listed in US Dollars. Its last market close was US$120.51 – a decrease of 2.99% over the previous week.
How to buy shares in IBM
- Compare share trading platforms. To buy shares in a US company from Australia you'll need to find a trading platform that offers access to US stock markets. If you're just starting out, look for a platform with low brokerage and foreign exchange fees.
- Open and fund your brokerage account. Complete an application with your personal and financial details, like your ID and tax file number. Fund your account with a bank transfer, credit card or debit card.
- Search for IBM. Find the share by name or ticker symbol: IBM. Research its history to confirm it's a solid investment against your financial goals.
- Purchase now or later. Buy today with a market order or use a limit order to delay your purchase until IBM reaches your desired price. To spread out your risk, look into dollar-cost averaging, which smooths out buying at consistent intervals and amounts.
- Decide on how many to buy. At last close price of US$120.51, weigh your budget against a diversified portfolio that can minimise risk through the market's ups and downs. You may be able to buy a fractional share of IBM, depending on your broker.
- Check in on your investment. Congratulations, you own a part of IBM. Optimise your portfolio by tracking how your stock — and even the business — performs with an eye on the long term. You may be eligible for dividends and shareholder voting rights on directors and management that can affect your stock.
What's in this guide?
- IBM key stats
- Compare share trading platforms
- Is IBM stock a buy or sell?
- IBM performance over time
- Can I short IBM shares?
- Is IBM suitable for ethical investing?
- Are IBM shares over-valued?
- IBM's financials
- How volatile are IBM shares?
- Does IBM pay a dividend?
- Have IBM shares ever split?
- Other common questions
How has coronavirus impacted IBM's share price?
Since the stock market crash in March caused by coronavirus, IBM's share price has had significant negative movement.
Its last market close was US$120.51, which is 19.57% down on its pre-crash value of US$149.84 and 33.07% up on the lowest point reached during the March crash when the shares fell as low as US$90.56.
If you had bought US$1,000 worth of IBM shares at the start of February 2020, those shares would have been worth US$648.23 at the bottom of the March crash, and if you held on to them, then as of the last market close they'd be worth US$824.29.
IBM share priceUse our graph to track the performance of IBM stocks over time.
IBM shares at a glance
|Latest market close||USD$120.51|
|52-week range||USD$90.56 - USD$158.75|
|50-day moving average||USD$124.2594|
|200-day moving average||USD$120.8124|
|Dividend yield||USD$6.52 (5.22%)|
|Earnings per share (TTM)||USD$8.811|
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Is it a good time to buy IBM stock?
The technical analysis gauge below displays real-time ratings for the timeframes you select. This is not a recommendation, however. It represents a technical analysis based on the most popular technical indicators: Moving Averages, Oscillators and Pivots. Finder might not concur and takes no responsibility.
IBM price performance over time
|1 week (2020-09-12)||N/A|
|1 month (2020-08-21)||-2.15%|
|3 months (2020-06-23)||0.92%|
|6 months (2020-03-23)||27.16%|
|1 year (2019-09-20)||-15.06%|
|2 years (2018-09-21)||-20.38%|
|3 years (2017-09-21)||-17.04%|
|5 years (2015-09-21)||-17.73%|
Is IBM under- or over-valued?
Valuing IBM stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of IBM's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
IBM's P/E ratio
IBM's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 14x. In other words, IBM shares trade at around 14x recent earnings.
That's relatively low compared to, say, the trailing 12-month P/E ratio for the NASDAQ 100 at the end of 2019 (27.29). The low P/E ratio could mean that investors are pessimistic about the outlook for the shares or simply that they're under-valued.
IBM's PEG ratio
IBM's "price/earnings-to-growth ratio" can be calculated by dividing its P/E ratio by its growth – to give 7.8951. A low ratio can be interpreted as meaning the shares offer better value, while a higher ratio can be interpreted as meaning the shares offer worse value.
The PEG ratio provides a broader view than just the P/E ratio, as it gives more insight into IBM's future profitability. By accounting for growth, it could also help you if you're comparing the share prices of multiple high-growth companies.
IBM's EBITDA (earnings before interest, taxes, depreciation and amortisation) is US$15.6 billion (£12.2 billion).
The EBITDA is a measure of a IBM's overall financial performance and is widely used to measure a its profitability.
|Revenue TTM||US$75.5 billion|
|Operating margin TTM||11.85%|
|Gross profit TTM||US$36.5 billion|
|Return on assets TTM||3.62%|
|Return on equity TTM||40.97%|
|Market capitalisation||US$109.3 billion|
TTM: trailing 12 months
Shorting IBM shares
There are currently 22.6 million IBM shares held short by investors – that's known as IBM's "short interest". This figure is 0.1% up from 22.6 million last month.
There are a few different ways that this level of interest in shorting IBM shares can be evaluated.
IBM's "short interest ratio" (SIR)
IBM's "short interest ratio" (SIR) is the quantity of IBM shares currently shorted divided by the average quantity of IBM shares traded daily (recently around 3.6 million). IBM's SIR currently stands at 6.28. In other words for every 100,000 IBM shares traded daily on the market, roughly 6280 shares are currently held short.
However IBM's short interest can also be evaluated against the total number of IBM shares, or, against the total number of tradable IBM shares (the shares that aren't held by "insiders" or major long-term shareholders – also known as the "float"). In this case IBM's short interest could be expressed as 0.03% of the outstanding shares (for every 100,000 IBM shares in existence, roughly 30 shares are currently held short) or 0.0254% of the tradable shares (for every 100,000 tradable IBM shares, roughly 25 shares are currently held short).
A SIR below 10% would generally be considered to indicate a fairly optimistic outlook for the share price, with fewer people currently willing to bet against IBM.
Find out more about how you can short IBM stock.
IBM's environmental, social and governance track record
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like IBM.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
IBM's total ESG risk score
Total ESG risk: 14.58
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and IBM's overall score of 14.58 (as at 07/31/2020) is excellent – landing it in it in the 12nd percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like IBM is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
IBM's environmental score
Environmental score: 0.91/100
IBM's environmental score of 0.91 puts it squarely in the 1st percentile of companies rated in the same sector. This could suggest that IBM is a leader in its sector terms of its environmental impact, and exposed to a lower level of risk.
IBM's social score
Social score: 9.43/100
IBM's social score of 9.43 puts it squarely in the 1st percentile of companies rated in the same sector. This could suggest that IBM is a leader in its sector when it comes to taking good care of its workforce and the communities it impacts.
IBM's governance score
Governance score: 5.75/100
IBM's governance score puts it squarely in the 1st percentile of companies rated in the same sector. That could suggest that IBM is a leader in its sector when it comes to responsible management and strategy, and exposed to a lower level of risk.
IBM's controversy score
Controversy score: 2/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. IBM scored a 2 out of 5 for controversy – the second-highest score possible, reflecting that IBM has, for the most part, managed to keep its nose clean.
Environmental, social, and governance (ESG) summary
|Total ESG score||14.58|
|Total ESG percentile||12.08|
|Environmental score percentile||1|
|Social score percentile||1|
|Governance score percentile||1|
|Level of controversy||2|
IBM share dividends
Dividend payout ratio: 73.58% of net profits
Recently IBM has paid out, on average, around 73.58% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 5.22% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), IBM shareholders could enjoy a 5.22% return on their shares, in the form of dividend payments. In IBM's case, that would currently equate to about $6.52 per share.
IBM's payout ratio would broadly be considered high, and as such this stock could appeal to those looking to generate an income. Bear in mind however that companies should normally also look to re-invest a decent amount of net profits to ensure future growth.
IBM's most recent dividend payout was on 9 September 2020. The latest dividend was paid out to all shareholders who bought their shares by 6 August 2020 (the "ex-dividend date").
Have IBM's shares ever split?
IBM's shares were split on a 2:1 basis on 26 May 1999. So if you had owned 1 share the day before before the split, the next day you'd have owned 2 shares. This wouldn't directly have changed the overall worth of your IBM shares – just the quantity. However, indirectly, the new 50% lower share price could have impacted the market appetite for IBM shares which in turn could have impacted IBM's share price.
IBM share price volatility
Over the last 12 months, IBM's shares have ranged in value from as little as US$90.56 up to US$158.75. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (NYSE average) beta is 1, while IBM's is 1.17. This would suggest that IBM's shares are a little bit more volatile than the average for this exchange and represent, relatively-speaking, a slightly higher risk (but potentially also market-beating returns).
International Business Machines Corporation operates as an integrated solutions and services company worldwide. Its Cloud & Cognitive Software segment offers software for vertical and domain-specific solutions in health, financial services, and Internet of Things (IoT), weather, and security software and services application areas; and customer information control system and storage, and analytics and integration software solutions to support client mission critical on-premise workloads in banking, airline, and retail industries. It also offers middleware and data platform software, including Red Hat, which enables the operation of clients' hybrid multi-cloud environments; and Cloud Paks, WebSphere distributed, and analytics platform software, such as DB2 distributed, information integration, and enterprise content management, as well as IoT, Blockchain and AI/Watson platforms. The company's Global Business Services segment offers business consulting services; system integration, application management, maintenance, and support services for packaged software; finance, procurement, talent and engagement, industry-specific business process outsourcing services; IT infrastructure and platform services. Its Global Technology Services segment provides project, managed, outsourcing, and cloud-delivered services for enterprise IT infrastructure environments; and IT infrastructure support services. It's Systems segment offers servers for businesses, cloud service providers, and scientific computing organizations; data storage products and solutions; and z/OS, an enterprise operating system, as well as Linux. Its Global Financing segment provides lease, installment payment, loan financing, short-term working capital financing, and remanufacturing and remarketing services. It was formerly known as Computing-Tabulating-Recording Co. and changed its name to International Business Machines Corporation in 1924. It was founded in 1911 and is headquartered in Armonk, New York.
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