IBM's Dividend Growth Slowdown: A Streak of One-Cent Bumps
IBM has a long history of increasing its quarterly dividend, and it's just marked its 31st consecutive year of doing so. The latest raise brought the quarterly payout from $1.68 to $1.69, which is roughly a four-cent annual increase. This trajectory is unmistakable, with IBM raising its dividend by one cent every quarter since 2019.
The company's peers, such as Cisco Systems and Microsoft, have also increased their dividends over the years, but at a faster pace than IBM. While IBM's yield of 2.83% is the highest among these companies, its growth rate is the slowest.
IBM's dividend appears to be safe, with $14.73 billion in free cash flow comfortably covering its $6.3 billion payout. However, the company is redirecting capital towards acquisitions and quantum computing bets, which may impact future dividends.