IBM Raises Dividend 25%

Firm paying out $2.5B, expecting $12B in stock buybacks
By Nick McMaster,  Newser Staff
Posted Apr 29, 2008 2:20 PM CDT
IBM Raises Dividend 25%
The IBM logo at the main campus in Research Triangle Park, N.C. is seen in this July 31, 2007 file photo.   (AP Photo/Karen Tam, file)

IBM raised its quarterly dividend for the thirteenth consecutive year today after posting strong Q1 earnings two weeks ago, the Wall Street Journal reports. The firm expects to pay $2.5 billion to shareholders this year after raising its dividend 25%, from 40 to 50 cents. IBM also expects to pass along another $12 billion to investors through stock buybacks.

An exec says IBM prefers buybacks to dividend payouts because they afford more flexibility with its cash pile, which it uses for acquisitions. A dividend rate is harder to cut back without making waves with investors, and IBM always prefers acquisitions to any kind of payout: "The primary objective is to be able to invest for growth," explains a VP. (More stock buyback stories.)

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