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
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)
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(Newser) – 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.