IBM (IBM) is a company that has been marked by its tremendous level of capital returns in the past couple of decades. This applies to both its prodigious dividend as well as its buyback. And while I love both when they’re well executed, IBM’s buyback has always sort of rubbed me the wrong way. I’ve been critical of the stock for a few reasons but one of the principal problems I’ve had is that IBM’s strategy has – for a long time – been to simply buy back as much stock as possible and hope for the best. This hasn’t worked – obviously – and in this article, I’ll try to quantify why it hasn’t worked and what it means for the stock going forward.
I’ll be using data collected from company filings and the charts are mine.