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Play IBM Strength With These ETFs

Sweta Killa
·4 min read

After the closing bell on Jan 24, International Business Machines IBM cheered investors as it reported solid fourth-quarter 2021 results, beating earnings estimates. Though the software giant lagged on revenues, it logged in its best revenue growth since 2011, bolstered by its cloud and consulting businesses.

IBM shares jumped as much as 7.5% in aftermarket hours. Investors could easily tap the opportune moment by investing in ETFs with the highest allocation to this tech giant. Some of these include First Trust NASDAQ Technology Dividend Index Fund TDIV, Invesco Dow Jones Industrial Average Dividend ETF DJD, WBI Power Factor High Dividend ETF WBIY, Global Beta Smart Income ETF GBDV and US Equity Dividend Select ETF RNDV.

Earnings in Focus

Earnings per share came in at $3.35, surpassing the Zacks Consensus Estimate of $3.39 and improving 78% from the year-ago earnings. Revenues grew 6.5% year over year to $16.7 billion but fell short of the consensus estimate of $17.5 billion. Notably, the revenue growth represents the best sales growth in 10 years, indicating that the company’s efforts to transform the 110-year-old tech giant are bearing fruit (see: all the Technology ETFs here).

The 110-year-old company has doubled down on the software and consulting businesses after shedding its former managed infrastructure unit in November, following years of growth and margin pressures. IBM expects mid-single-digit revenue growth in 2022 plus a boost from incremental sales to Kyndryl, a new public company, of about 3%.

ETFs in Focus

First Trust NASDAQ Technology Dividend Index Fund (TDIV)

First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. It charges 50 bps in annual fees and holds about 93 securities in its basket. Of these firms, IBM takes the top spot, making up 8.8% of the assets.

First Trust NASDAQ Technology Dividend Index Fund has amassed $1.8 billion in its asset base while trading in a volume of around 76,000 shares per day (read: 5 Cheap ETFs to Play Amid Tech Stocks' Worst Start Since 2016).

Invesco Dow Jones Industrial Average Dividend ETF (DJD)

Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with IBM occupying the third position accounting for 6.5% allocation.

Invesco Dow Jones Industrial Average Dividend ETF has managed assets worth $177 million, while trading in volume of 22,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

WBI Power Factor High Dividend ETF (WBIY)

WBI Power Factor High Dividend ETF offers exposure to quality stocks that have the highest dividend yield with a deep value bias and multi-factor fundamental analysis. It follows the Solactive Power Factor High Dividend Index, holding 51 stocks in the basket. IBM takes the third position with a 4.9% share in the basket.

WBI Power Factor High Dividend ETF has amassed $66.5 million in its asset base and charges 70 bps in annual fees. It trades in a lower volume of 4,000 shares a day on average (read: 10 Dividend ETFs Up At Least 4% This Year & Yielding At Least 3%).

Global Beta Smart Income ETF (GBDV)

Global Beta Smart Income ETF is designed to provide exposure to dividend-paying stocks within the S&P 900 with the highest average 12-month trailing dividend yield over each of the prior four quarters by tracking the Global Beta Smart Income Index. It holds 93 securities in its basket, with IBM taking the fifth spot at 4.5%.

Global Beta Smart Income ETF has gathered $2.8 million in its asset base and trades in an average daily volume of under 1,000 shares. It charges 29 bps in annual fees and has a Zacks ETF Rank #3.

US Equity Dividend Select ETF (RNDV)

US Equity Dividend Select ETF seeks to provide a diversified portfolio of dividend-paying securities with an above-average yield. It follows the Nasdaq Riskalyze US Large Cap Select Dividend Index. The fund holds 214 stocks in its basket, with IBM taking the top spot with a 4.6% share.

US Equity Dividend Select ETF has AUM of $21.2 million and an average daily volume of 5,000 shares. The product charges 50 bps in annual fees and has a Zacks ETF Rank #3.


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International Business Machines Corporation (IBM) : Free Stock Analysis Report
 
Invesco Dow Jones Industrial Average Dividend ETF (DJD): ETF Research Reports
 
First Trust NASDAQ Technology Dividend ETF (TDIV): ETF Research Reports
 
WBI Power Factor High Dividend ETF (WBIY): ETF Research Reports
 
First Trust US Equity Dividend Select ETF (RNDV): ETF Research Reports
 
Global Beta Smart Income ETF (GBDV): ETF Research Reports
 
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