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After the closing bell on Apr 20, International Business Machines (IBM - Free Report) reported mixed first-quarter 2020 results. The company beat earnings estimates but lagged on revenues. It withdrew its full-year guidance citing uncertainty surrounding the COVID-19 pandemic.
Earnings per share came in at $1.84, surpassing the Zacks Consensus Estimate by six cents, but declined from the year-ago earnings of $2.25. Revenues declined 3.4% year over year to $17.57 billion and fell shy of the consensus estimate of $17.97 billion. Even though coronavirus took a toll on the company’s software business, the shift to remote work boosted the cloud services offering. As such, revenue from cloud services rose 19% to $5.4 billion in the first quarter (read: Rising Work-From-Home Trend to Boost 5 Industries & ETFs).
Shares of IBM plunged more than 4% in after-market hours. The stock has a Zacks Rank #3 (Hold) and VGM Score of D. It belongs to a bottom-ranked Zacks industry (bottom 30%).
ETFs to Watch
Given this, ETFs with the highest allocation to this tech giant will be in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises (see: all the Technology ETFs here).
First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report)
This fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed more than $1 billion in its asset base while trading in volume of around 137,000 shares per day. It charges 50 bps in annual fees and holds about 92 securities in its basket. Of these firms, IBM takes the fifth spot, making up roughly 7.7% of the assets.
This product invests in securities on the S&P 900 which excludes the top 5% of securities by dividend yield, top 5% of securities within each sector by dividend payout ratio, selects the top 60 securities by dividend yield and re-weighs those securities according to the revenue earned with a maximum 5% per company weighting. The fund holds 59 stocks in its basket, with IBM taking the third spot with 6.6% share. It has AUM of $732.8 million and average daily volume of 269,000 shares. The product charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
This ETF offers exposure to high-yielding companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 30 stocks in its basket, with IBM occupying the fourth position with 5.5% allocation. DJD has been able to manage assets worth $113.4 million, while trading in volume of 43,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold) (read: What's in Store for Dow ETFs in Q1 Earnings?).
Global Beta Smart Income ETF
This product 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 73 securities in its basket with IBM taking the fourth spot at 5.30%. GBDV launched on late December with zero management fees for the first six months through Jun 30, 2020. It has gathered $1.4 million in its asset base and trades in average daily volume of 4,000 shares.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report)
With AUM of $1.3 billion, the fund offers exposure to stocks that have shown highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks with IBM taking the ninth spot in the basket with 4.4% allocation. FDL charges 45 bps in annual fees from investors and trades in solid volume of more than 349,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook (read: 6 Overlooked High-Yielding ETFs in Focus Post Fed Minutes).
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IBM Reports Mixed Q1 Results: ETFs in Focus
After the closing bell on Apr 20, International Business Machines (IBM - Free Report) reported mixed first-quarter 2020 results. The company beat earnings estimates but lagged on revenues. It withdrew its full-year guidance citing uncertainty surrounding the COVID-19 pandemic.
Earnings per share came in at $1.84, surpassing the Zacks Consensus Estimate by six cents, but declined from the year-ago earnings of $2.25. Revenues declined 3.4% year over year to $17.57 billion and fell shy of the consensus estimate of $17.97 billion. Even though coronavirus took a toll on the company’s software business, the shift to remote work boosted the cloud services offering. As such, revenue from cloud services rose 19% to $5.4 billion in the first quarter (read: Rising Work-From-Home Trend to Boost 5 Industries & ETFs).
Shares of IBM plunged more than 4% in after-market hours. The stock has a Zacks Rank #3 (Hold) and VGM Score of D. It belongs to a bottom-ranked Zacks industry (bottom 30%).
ETFs to Watch
Given this, ETFs with the highest allocation to this tech giant will be in focus. Investors should closely monitor the movement of these funds and grab the opportunity whenever it arises (see: all the Technology ETFs here).
First Trust NASDAQ Technology Dividend Index Fund (TDIV - Free Report)
This fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. The product has amassed more than $1 billion in its asset base while trading in volume of around 137,000 shares per day. It charges 50 bps in annual fees and holds about 92 securities in its basket. Of these firms, IBM takes the fifth spot, making up roughly 7.7% of the assets.
Invesco S&P Ultra Dividend Revenue ETF (RDIV - Free Report)
This product invests in securities on the S&P 900 which excludes the top 5% of securities by dividend yield, top 5% of securities within each sector by dividend payout ratio, selects the top 60 securities by dividend yield and re-weighs those securities according to the revenue earned with a maximum 5% per company weighting. The fund holds 59 stocks in its basket, with IBM taking the third spot with 6.6% share. It has AUM of $732.8 million and average daily volume of 269,000 shares. The product charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook.
Invesco Dow Jones Industrial Average Dividend ETF (DJD - Free Report)
This ETF offers exposure to high-yielding companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 30 stocks in its basket, with IBM occupying the fourth position with 5.5% allocation. DJD has been able to manage assets worth $113.4 million, while trading in volume of 43,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold) (read: What's in Store for Dow ETFs in Q1 Earnings?).
Global Beta Smart Income ETF
This product 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 73 securities in its basket with IBM taking the fourth spot at 5.30%. GBDV launched on late December with zero management fees for the first six months through Jun 30, 2020. It has gathered $1.4 million in its asset base and trades in average daily volume of 4,000 shares.
First Trust Morningstar Dividend Leaders Index Fund (FDL - Free Report)
With AUM of $1.3 billion, the fund offers exposure to stocks that have shown highest dividend consistency and dividend sustainability by tracking the Morningstar Dividend Leaders Index. It holds 100 stocks with IBM taking the ninth spot in the basket with 4.4% allocation. FDL charges 45 bps in annual fees from investors and trades in solid volume of more than 349,000 shares a day. It has a Zacks ETF Rank #3 with a Medium risk outlook (read: 6 Overlooked High-Yielding ETFs in Focus Post Fed Minutes).
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>