What Is the Dividend Payout for IBM Stock?

IBM (NYSE: IBM) isn't a "Magnificent Seven" member but is nonetheless magnificent to those of its shareholders who are income-focused. In their quests to find the next shiny object in the financial markets, some investors might overlook IBM, an old but surprisingly up-to-date technology company unafraid to provide a decent yield.

Dismissing IBM as a dinosaur is a mistake, as the company just rolled out a generative artificial intelligence (AI) cybersecurity assistant that's as relevant as can be in the wake of the CrowdStrike update fiasco. So don't hesitate to steal some yield while parking your capital with the concurrently old and new IBM.

How much does IBM stock pay in dividends?

IBM has a track record of adding $0.01 to its quarterly dividend distribution every year since 2020. While the company's not a fast dividend grower, IBM's current payout of $1.67 per quarter, or $6.68 per year, really isn't half bad, comparatively speaking.

While the technology sector's average forward annual dividend yield is 1.025%, IBM's yield is a generous 3.47%. This shows that IBM really walks the walk when it comes to returning capital to its shareholders.

IBM keeps the cash flowing

Just as important, IBM stock is on a long-term uptrend. In other words, shareholders haven't sacrificed share-price appreciation in the quest for outsized dividend payouts.

Moreover, IBM's financials suggest that the company is in a good position to continue paying its quarterly dividends. In 2024's second quarter, the company grew its revenue 2% year over year to $15.8 billion and increased its generally accepted accounting principles (GAAP) -measured gross profit margin 180 basis points to 56.8%.

Furthermore, IBM's free cash flow grew $1.1 billion to $4.5 billion in Q2 of 2024. Maybe these aren't the mind-blowing stats that some Magnificent Seven members would deliver, but they indicate that IBM's financial health is sufficient to allow for the continued, slowly growing dividend distributions that longtime investors have come to expect from IBM.

Before you buy stock in International Business Machines, consider this: