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.