Accenture Plc (ACN), International Business Machines Corp. (IBM), Oracle Corporation (ORCL): Should Investors Buy These Three Companies Now?

Oracle might repurchase as much as $12 billion worth of shares

Oracle Corporation (NASDAQ:ORCL) is another tech giant that experienced a large drop recently. Its share price fell nearly 9% to only $30.30 per share due to sluggish sales in the fourth quarter. Oracle Corporation (NASDAQ:ORCL)’s revenue came in at $10.95 billion, a bit lower than analysts’ expectations of $11.12 billion. Oracle Corporation (NASDAQ:ORCL) grew its software revenue 4% while simultaneously experiencing a 9% decline in the hardware business. However, the company still generated as much as $14 billion in operating cash flow for the full year, and raised its cash position to as high as $32 billion.

Interestingly, the company doubled its quarterly dividend, from $0.06 per share to $0.12 per share. Moreover, its shareholders could receive more cash from the company with its recent additional potential share repurchase of as much as $12 billion. The market values Oracle Corporation (NASDAQ:ORCL) at only 7.4 times its trailing EBITDA. With a dividend yield of 1.6% and a potential share buyback yield of 8.4%, investors might expect a total yield of around 10%.

My Foolish take

Among the three companies, I like Oracle Corporation (NASDAQ:ORCL) and International Business Machines Corp. (NYSE:IBM) due to their global leading positions and their potential cash return to shareholders. While Oracle Corporation (NASDAQ:ORCL) could return as much as 10% in total yield to investors, IBM’s total yield is much higher, at as much as 35%, including the current dividend yield of 2%, the potential dividend yield of 9.4% (on $20 billion potential dividends) and the potential buyback yield of nearly 23.6% (on $50 billion potential share repurchases).

The article Should Investors Buy These 3 Companies Now? originally appeared on Fool.com and is written by Anh Hoang.

Anh HOANG owns shares of Oracle. The Motley Fool recommends Accenture. The Motley Fool owns shares of International Business Machines. and Oracle. Anh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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