In this article we will share our list of the top 5 dividend stocks to buy in 2021. For a detailed discussion of the methodology as well as a more comprehensive list please see The Top 10 Dividend Stocks To Buy in 2021.
5. IBM (IBM)
Dividend Yield: 4.59%
As a consistent leader in the tech industry, IBM has shown consistent payout ratios and an increase in dividend yields. The tech industry is a sector you’ll want to invest in as it’s only going to continue to change and grow. IBM has proven to be a safe bet.
International Business Machines Corp (NYSE: IBM) started as the computing, tabulating, and recording firm in the late 1800s. Its first major contract was to supply equipment for the tabulation and assessment of the U.S. census in 1890. The company grew over the years and become a leading supplier of computer systems in the late 1990s. However, the company has shifted its focus to cloud computing and AI in recent years. Its current product portfolio ranges from IT services and cloud offerings to artificial intelligence and enterprise software.
IBM recently announced strong financial results for the first quarter, mainly driven by its cloud computing services. The company reported earnings of $955 million, or $1.06 per share for the three months ended March 31, as compared to $1.18 billion, or $1.31 per share in the year-ago quarter. On an adjusted basis, the company earned $1.77 per share, beating the consensus forecast of $1.69 per share.
Revenue inched up 1 percent to $17.73 billion, above analysts’ average estimate of $17.32 billion. If we look at the performance of different segments, revenue from the Cloud & Cognitive Software business rose 3.8 percent to $5.44 billion, while revenue from Global Business Services increased 2.4 percent to $4.2 billion. However, revenue from Global Technology Services slipped 1.5 percent to $6.4 billion.
Famed short seller Jim Chanos doesn’t think IBM is a great long-term investment. He believes IBM is a “value trap”. You can read about his IBM short thesis in this article.