NEW YORK ( TheStreet) -- Over the last five years IBM ( IBM) has been very, very good for investors.
Since November 2008 the shares have more than doubled in value and the dividend has been increasing at regular intervals, standing now at 85 cents per share, a yield of 1.66%. IBM can well afford the $1 billion quarterly payout -- profits range from $3 billion to $5 billion each quarter. Despite this, all is not well at Big Blue, at least according to analysts. A quick calculation shows IBM's market cap is only 2.21 times its annual sales. The figure for Apple ( AAPL) is 2.73, for Microsoft ( MSFT) 3.12 and for Google ( GOOG) 4.95. The only large tech company doing worse by this measure is Intel ( INTC), at 1.96. IBM is literally as cheap as chips. Why? Stagnation on the top line is usually blamed. IBM sales today are no higher than in 2008. Its gains are explained entirely by rigid cost-cutting, which has slowly increased profit margins, and has gotten operating margins to near 25%, close to those of Apple and Google. Moreover, IBM makes few waves. Check the news headlines around the company and you will find very little that's interesting. It's all new customers, new research results, new capabilities and new donations of gear. Services chief Michael Daniels recently sold a little over 10,000 shares, but he was in the process of retiring. On Wall Street $2 million is just a gold watch. IBM has a road map with $20 billion in acquisitions due by the end of 2015, If you really want to know who the cloud leader is, in fact, it's not Red Hat ( RHT) or Rackspace ( RAX) or even Google. It's IBM. No company has built as many cloud systems, no company brings in more revenue from cloud, and no company is as focused on enterprise cloud computing as IBM. Just as IBM spent the 1990s and 2000s quietly unifying its operating system strategy under Linux, it has spent most of this decade building a complete cloud stack -- infrastructure, platforms, software applications and services that, for most big enterprises, make it the only choice in the field. The last is key. At the end of the day, what companies want from cloud isn't the infrastructure or the "big data," but applications and solutions to their most intractable problems. That's what IBM's software acquisition strategy is about, having those solutions ready before big customers even ask for them. Silicon Valley is a loud and raucous place, it's capitalism that is red in tooth and claw, and so we assume that is what technology is supposed to be about. But it doesn't have to be that way. IBM is quietly selling at a market-average 14 times earnings, with steadily rising dividends, rising profits and operating margins, plus a clear idea of how it will get to the cloud market before anyone else. It really is as cheap as chips. At the time of publication the author had positions in IBM, MSFT, GOOG, INTC, RHT, and AAPL. Follow @DanaBlankenhorn This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.