Back to top

Image: Bigstock

ETFs to Buy as IBM Tops Estimates in Q1 Earnings

Read MoreHide Full Article

After the closing bell on Apr 19, International Business Machines (IBM - Free Report) cheered investors as it reported solid first-quarter 2022 results, beating earnings and revenues estimates. This suggests that the software giant’s efforts to transform the 110-year-old tech giant into cloud computing and artificial intelligence software are paying off.

IBM shares spiked as much as 4% 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 - Free Report) , Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report) , WBI Power Factor High Dividend ETF (WBIY - Free Report) , Global Beta Smart Income ETF and US Equity Dividend Select ETF (RNDV - Free Report) .

Earnings in Focus

Earnings per share came in at $1.40, surpassing the Zacks Consensus Estimate of $1.34 and improving 25% from the year-ago earnings. Revenues grew 7.7% year over year to $14.2 billion and edged past the consensus estimate of $13.7 billion (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 now expects revenue growth at the high end of the mid-single-digit range for 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 - Free Report)

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 8.5% 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 125,000 shares per day (read: Dividend ETFs Scaling New Highs).

Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)

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 top position accounting for 7.4% allocation.

Invesco Dow Jones Industrial Average Dividend ETF has managed assets worth $206.5 million, while trading in a volume of 24,000 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 - Free Report)

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 50 stocks in the basket. IBM takes the sxith position with a 4.7% share in the basket.

WBI Power Factor High Dividend ETF has amassed $67.5 million in its asset base and charges 70 bps in annual fees. It trades in a lower volume of 7,000 shares a day on average.

Global Beta Smart Income ETF

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 95 securities in its basket, with IBM taking the seventh spot at 4.0% (read: 6 Solid Sector ETFs to Buy Now).

Global Beta Smart Income ETF has gathered $3.6 million in its asset base and trades in an average daily volume of under 6,000 shares. It charges 29 bps in annual fees and has a Zacks ETF Rank #3.

US Equity Dividend Select ETF (RNDV - Free Report)

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 228 stocks in its basket, with IBM taking the top spot with a 3.8% share.

US Equity Dividend Select ETF has AUM of $19.6 million and an average daily volume of 3,000 shares. The product charges 50 bps in annual fees and has a Zacks ETF Rank #3.