IBM Boosts Dividend and Share Repurchases (IBM)

IBM Boosts Dividend and Share Repurchases (IBM)


Early on Tuesday, information technology giant International Business Machines Corporation (IBM) announced that its board of directors has approved a 12% dividend increase and an additional $5 billion in share buybacks.

Now, Big Blue’s quarterly dividend payout will now be 95 cents per share, up from the previous payout of 85 cents per share. This next dividend will be paid on June 10 to shareholders of record on May 10.

This is the 18th year in a row that IBM has increased its dividend payout and the 10th year in a row of double-digit percentage increase.

Despite the dividend hike, many analysts and investors are still not satisfied with the company’s current divided policy. The company’s updated dividend yield is only 1.90%. This trails most of the company’s established tech competitors; Microsoft (MSFT) has a dividend yield of 2.80%, Intel (INTC) is at 3.8%, and Hewlett-Packard (HPQ) is at 2.6%, and relatively new dividend payer Apple (AAPL) is at 3.00%. Analysts were hoping for at least a $1.00 per share quarterly dividend from IBM.

However, the company remains committed to buying back shares, adding $5 billion to its remaining $6.2 billion share buyback program, thus bringing the total to $11.2 billion. Moreover, the company plans to approve furthere share buybacks, saying “IBM expects to request additional share repurchase authorization at the October 2013 board meeting. IBM has reduced its share count by a third since the beginning of 2000.”

IBM Corp shares were up 83 cents, or +0.42%, during Tuesday morning trading. The stock is up +1.43% year-to-date.

The Bottom Line
Shares of IBM Corp (IBM) have a dividend yield of 1.90% based on Tuesday’s intraday trading price of $199.98 and the company’s annualized dividend payout of $3.80 per share.

International Business Machines Corporation (IBM) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.