4-Star Stocks Poised to Pop: IBM

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, global IT solutions giant International Business Machines (NYSE: IBM) has earned a respected four-star ranking.

With that in mind, let's take a closer look at IBM's business and see what CAPS investors are saying about the stock right now.

IBM facts

Headquarters (founded)

Armonk, N.Y. (1910)

Market Cap

$239.8 billion


IT consulting and other services

Trailing-12-Month Revenue

$106.1 billion


CEO Virginia Rometty (since January 2012)
CFO Mark Loughridge (since July 2010)

Return on Capital (average, past 3 years)



$11.2 billion / $32.4 billion

Dividend Yield




Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 91% of the 4,633 members who have rated IBM believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, JohnCLeven, succinctly summed up the bull case for our community:

IBM is a wonderful, consistent company at a fair price. My only concern is the [long-term] durability of IBM's moat due to being a tech company. Looks great for the medium term at least.

5 yr avg ROIC 18.7%, 5 yr avg ROE 59% ... [free cash flow]/sales% 15% (cash king). ... Reasonable debt level. [Dividend yield] around 1.6%

14x FCF, 14x P/E ...

I'm conservatively forecasting 12%-15% compounded returns, including reinvested dividends for the next 2-5 years. I got a feeling the S&P ain't gonna keep up with that.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, IBM may not be your top choice.

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Want to see how well (or not so well) the stocks in this series are performing? Follow theTrackPoisedToCAPS account.