IBM Stock Plunges 33%, Dividend Yield Rises to 3%

IBM's stock has fallen to $224, down 33% from its 52-week high of $332.46.

The company's dividend yield has increased to about 3%, attracting income investors' attention.

However, the dividend payout consumes a significant portion of IBM's free cash flow, accounting for about 40% of the company's expected $15.7 billion in free cash flow this year.

The company generated $14.7 billion in free cash flow last year and still expects an increase of about $1 billion in 2026.

Despite its stable dividend payout, IBM's revenue growth has slowed down to 1% in the second quarter, causing the stock price to drop.

The company's software segment delivered a 5% revenue growth, but consulting and infrastructure revenue declined due to a sharp fall in mainframe computer sales.