Will International Business Machines Corp. (IBM) Help You Retire Rich?

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IBM has done an excellent job of anticipating the need to transform itself from a commodity consumer hardware business to a diversified technology-services company, beating most of its former hardware rivals into more promising areas. But even though IBM has been able to keep raising profits, revenue has slowed down, pointing to long-term concerns for the company.

In response, IBM is looking at several key tech trends. The big data concept is one of the keys to the company’s future, as IBM tries to bring not only raw data but also analysis to the deluge of information available via smart mobile devices, making those devices more useful and essential going forward. In addition, the company will challenge Amazon.com, Inc. (NASDAQ:AMZN) , as well as smaller players, in attacking the cloud-computing space: IBM is looking to focus not just on the biggest enterprises, but also on mid-sized businesses that have previously gone underserved.

But IBM isn’t the only company doing so. Many believe that Oracle Corporation (NASDAQ:ORCL)‘s recent purchase of Acme Packet was an attack on networking rival Cisco Systems, Inc. (NASDAQ:CSCO) . But both Oracle and Cisco have been trying to achieve the same ends as IBM: broadening their offerings beyond their respective strengths to offer complete technology solutions to their customers without relying on outside third parties.

For retirees and other conservative investors, IBM’s dividend yield has always been below where it could be, given the company’s greater emphasis on share buybacks to bolster EPS toward its long-term target of $20 per share by 2015. With the stock near full valuation, you may prefer to wait for a pullback before deciding to add IBM to your retirement portfolio.

The article Will IBM Help You Retire Rich? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Cisco Systems. The Motley Fool owns shares of Amazon.com, IBM, and Oracle.

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