Is International Business Machines Corp. (IBM) Losing its Luster?

IBM earned $15.25 per share in 2012 diluted operating earnings, marking a new record. The company has reported double digit diluted EPS growth for 10 years in a row.

In addition, it’s worth noting that the company’s dividend payments have been an important piece of its total return puzzle. 2012 marked the 97th consecutive year in which IBM has paid a dividend, and the company increased its dividend earlier this year.

The Foolish takeaway

When I last wrote about International Business Machines Corp. (NYSE:IBM), shares were hovering around $206 per share, and my position was that I’d consider the stock to be a buy under $190 per share.

I still hold that belief, and due to the stock’s steady downtrend over the past few weeks shares of IBM are now in my buy zone. At its current level, I think the market has overreacted to the company’s short-term struggles, and that a higher multiple is warranted assuming IBM gets back to its days of strong growth.

At its current price, the stock yields 2%, a level much more in-line with the yield on the broader market than where IBM usually trades. Investors interested in highly profitable technology stocks should seriously consider IBM now, at what looks to be an attractive entry point.

Robert Ciura owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel, International Business Machines., and Microsoft. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Is This Technology Giant Losing its Luster? originally appeared on and is written by Robert Ciura.

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