BOSTON ( TheStreet) -- IBM (IBM - Get Report), known as Big Blue, is among the most storied U.S. companies. The original "business machine manufacturer" pioneered computing and, then, in the 1990s, as it lost hardware market share to the likes of HP (HPQ - Get Report), Dell (DELL - Get Report) and Apple (AAPL - Get Report), it reinvented itself as a global technology consultant.
Management, led by current CEO Sam Palmisano, has proven to be forward-looking, nimble and, more importantly, dedicated to rewarding shareholders. IBM's stock has returned 14%, annualized, since 2008, third best of the 30 Dow equities.
IBM was founded in 1911 as the Computing Tabulating Recording Corp. CTR's first products included a computing scale and a time clock to record workers' arrival and departure times. The original "electric tabulating machine" was invented by Herman Hollerith in 1889. It was refined and remodeled repeatedly in CTR's early years. A key turning point for the technology first-mover was the recruitment of Tom Watson Sr. in 1914. Watson, a manager at heart, bred and groomed one of the most dominant sales forces in American history by offering outstanding incentives and insisting on a rigid dress code and conduct policy.
Watson achieved the rank of president within 11 months and, within four years, had doubled CTR's net sales and expanded business to foreign markets, including Europe and South America. In 1924, the firm officially reformed its moniker to IBM. Under the leadership of Watson, IBM became an American powerhouse. When his son, Tom Watson Jr., took the reins in 1952, IBM was investing heavily in research and development, and had established laboratories across the country, which subsequently led to the creation of the first "self-learning" computer program, invention of the Fortran programming language and a newfound focus on information technology, which, at the time, had little appeal to traditional businesses.IBM, although no longer considered a hardware company, is still among the most esteemed researchers in the country. It holds more patents than any other technology company, and its employees have won numerous Nobel prizes, Medals of Science and Turing awards. More relevant to readers, IBM's stock has been a consistent top performer and remains an attractive blue-chip investment. IBM is a so-called dividend aristocrat, having paid consistent distributions since 1913. The payout has grown 18% in the past 12 months and 18% and 27%, annually, over a three- and five-year span, respectively. However, the current yield is 1.6%.