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International Business MachinesMIL:1IBM +0.24%54 5-Year Yield-on-Cost % is 3.24 as of Jul. 21, 2026, which is 30% below its 10-year median of 4.60. GuruFocus rates MIL:1IBM with a GF Score™ of 54/100 and a GF Value™ of €207.53 (Modestly Undervalued). The stock has 1 warning sign investors should review. Among 1,027 Software companies, International Business Machines ranks better than 52% on this metric.
The historical rank and industry rank for International Business Machines's 5-Year Yield-on-Cost % or its related term are showing as below:
MIL:1IBM'
s 5-Year Yield-on-Cost % Range Over the Past 10 Years
Min: 2.24 Med: 4.6 Max: 7.27
Current: 3.24
During the past 13 years, International Business Machines's highest Yield on Cost was 7.27. The lowest was 2.24. And the median was 4.60.
MIL:1IBM's 5-Year Yield-on-Cost % is ranked better than 52% of 1027
companies
in the Software industry
Industry Median: 3.11
vs MIL:1IBM: 3.24
International Business Machines (MIL:1IBM) 5-Year Yield-on-Cost % Explanation
Of course the risk here is that the company may not raise its dividends as it did before. The key is to select the companies that can consistently raise its dividends. Usually companies with long history of raising dividends tend to do so.
International Business Machines 5-Year Yield-on-Cost % Related Terms
MIL:1IBM vs ACN, FISV, FIS: 5-Year Yield-on-Cost % Comparison
For the Information Technology Services subindustry, International Business Machines's 5-Year Yield-on-Cost %, along with its competitors' market caps and 5-Year Yield-on-Cost % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
International Business Machines 5-Year Yield-on-Cost % vs Software Industry
For the Software industry and Technology sector, International Business Machines's 5-Year Yield-on-Cost % distribution charts can be found below:
* The bar in red indicates where International Business Machines's 5-Year Yield-on-Cost % falls into.
International Business Machines 5-Year Yield-on-Cost % Calculation
Dividend Yield % and dividend growth of a stock is an important factor for income investors. But if company A raises its dividend constantly faster than company B, company A's future dividend yield might be much higher than Company B's even if their yields are the same now and their stock prices do not change.
Yield on Cost assumes that you buy and the stock today, and hold it for 5 years. If the company raises it dividends at the same rate as it did over the past 5 years, the dividends investors receive annually in 5 years relative to the stock price today.
International Business Machines (MIL:1IBM) has a 5-Year Yield-on-Cost % of 3.24 as of Jul. 21, 2026. 5-Year Yield on Cost measures the expected yield based on a company's current yield and 5-year dividend growth. View historical data on International Business Machines and its competitors. This is 30% below median its historical median of 4.60. Over the past decade, International Business Machines' 5-Year Yield-on-Cost % has ranged from 2.24 to 7.27. According to the industry distribution chart, International Business Machines ranks #493 out of 1027 companies in the Software industry, placing it in the top 48%.
Is International Business Machines' 5-Year Yield-on-Cost % too high?
International Business Machines' current 5-Year Yield-on-Cost % of 3.24 is 30% below median its 10-year median of 4.60. Over the past 10 years, this metric has ranged from a low of 2.24 to a high of 7.27. The Software industry median 5-Year Yield-on-Cost % is 3.11. International Business Machines' value of 3.24 is 4.2% above this industry median. Based on the distribution chart, International Business Machines ranks #493 out of 1027 companies in the Software industry, which is above the industry midpoint. Overall, International Business Machines has a GF Score™ of 54/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does International Business Machines' 5-Year Yield-on-Cost % compare to ACN and FISV?
According to the Software industry distribution chart, International Business Machines ranks #493 out of 1027 companies for 5-Year Yield-on-Cost %. This puts International Business Machines in the upper half of its industry. The industry median 5-Year Yield-on-Cost % is 3.11. International Business Machines' value of 3.24 is 4.2% above this benchmark. Historically, International Business Machines' own 5-Year Yield-on-Cost % has ranged from 2.24 to 7.27 over the past decade. While the company's 10-year median is 4.60 vs. the industry median of 3.11, International Business Machines has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 5-Year Yield-on-Cost % for a Software company?
The median 5-Year Yield-on-Cost % among Software companies is 3.11, based on 1,027 companies in the industry. Companies in the top quartile (top 25%) have a 5-Year Yield-on-Cost % significantly above this median, while those in the bottom quartile fall well below. However, 5-Year Yield-on-Cost % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. International Business Machines's current 5-Year Yield-on-Cost % of 3.24 is 4.2% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 5-Year Yield-on-Cost % mean?
A high 5-Year Yield-on-Cost % can signal that a stock is expensive relative to its fundamentals. 5-Year Yield on Cost measures the expected yield based on a company's current yield and 5-year dividend growth. View historical data on International Business Machines and its competitors. For the Software industry, the median 5-Year Yield-on-Cost % is 3.11 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. International Business Machines's current 5-Year Yield-on-Cost % is 3.24, which is 30% below median its own 10-year median of 4.60. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is International Business Machines stock overvalued right now?
Based on GuruFocus' analysis, International Business Machines (MIL:1IBM) is currently considered Modestly Undervalued. The stock's GF Value™ is €207.53, compared to a current price of €184.90 — trading 10.9% below its estimated fair value. The current 5-Year Yield-on-Cost % is 3.24, which is 30% below median its 10-year median of 4.60 and 4.2% above the Software industry median of 3.11. International Business Machines' overall GF Score™ is 54/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 5-Year Yield-on-Cost % calculated?
5-Year Yield-on-Cost % is calculated from a company's financial statements. For International Business Machines (MIL:1IBM), the current 5-Year Yield-on-Cost % is 3.24 as of Jul. 21, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is International Business Machines (MIL:1IBM) Overvalued in 2026?
Based on GuruFocus' analysis, International Business Machines stock appears to be undervalued.
The current stock price of €184.90 is trading 10.9% below its estimated GF Value™ of €207.53.
GuruFocus considers International Business Machines to be Modestly Undervalued.
Key valuation signals for MIL:1IBM:
5-Year Yield-on-Cost %: 3.24 (30% below median its 10-year median of 4.60)
GF Value™: €207.53 vs. price of €184.90 (10.9% below fair value)
Industry Position: 4.2% above the Software median (#493 of 1027)
No single metric tells the full story. See the MIL:1IBM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
International Business Machines Business Description
Incorporated in 1911, International Business Machines, or IBM, is one of the oldest technology companies in the world. It provides software, IT consulting services, and hardware to help business customers modernize their technology workflows. IBM operates in 175 countries and employs approximately 300,000 people. The company has a robust roster of business partners to service its clients, which includes 95% of all Fortune 500 companies. IBM's products, including Red Hat, watsonx, and mainframes, handle some of the world's most important data workloads in areas like finance and retail.
54GF Score
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