IBM's Dividend Growth Slows as Inflation Rises

IBM has maintained its impressive streak of consecutive dividend increases for over three decades. With 31 years of uninterrupted quarterly dividend payments, IBM's latest raise from $1.68 to $1.69 may seem significant, but it translates to only a penny per quarter or four cents on an annualized rate.

Looking back at the history of IBM's dividend growth, the trend is unmistakable. The company has consistently increased its quarterly payouts over the years, with notable jumps in 2015 from $1.10 to $1.30 and 2019 from $1.57 to $1.62.

However, recent raises have been minimal, with five consecutive one-cent bumps in a row. This may raise concerns about the pace of dividend growth, especially considering the current inflation rate of around 3%.

Cisco Systems and Microsoft have also increased their quarterly dividends over the years, but at a faster pace than IBM. Oracle has maintained its quarterly payout at $0.50 since early 2025.

IBM's CFO Jim Kavanaugh emphasized that the company's cash flow is ample to support its dividend payments, with free cash flow of $14.73 billion in 2025 and a dividend payout of $6.255 billion. However, the company has been redirecting its focus towards investing in quantum computing and acquiring Confluent and HashiCorp.