What is the dividend payout for IBM stock?

IBM (IBM -0.23%) it’s not a “Magnificent Seven” member, but it’s still magnificent for its income-focused shareholders. In their quest to find the next shiny object in the financial markets, some investors may overlook IBM, an old but surprisingly up-to-date technology company that isn’t afraid to deliver a decent return.

Dismissing IBM as a dinosaur is a mistake, as the company has just released a generative artificial intelligence (AI) cybersecurity assistant that is as relevant as possible following CrowdStrike update fiasco. So feel free to steal some of the yield while parking your capital with old and new IBM at the same time.

How much does IBM stock pay in dividends?

IBM has a track record of adding $0.01 to its quarterly dividend distribution every year starting in 2020. Although the company is not growing dividends quickly, 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 annual forward dividend yield is 1.025%, IBM’s yield is 3.47%. This shows that IBM is really on track when it comes to returning capital to its shareholders.

IBM maintains cash flow

Just as importantly, IBM shares are on a long-term uptrend. In other words, shareholders have not sacrificed stock price appreciation in search of huge dividend payouts.

Moreover, IBM’s financial data suggests that the company is in a good position to continue paying its quarterly dividends. In the second quarter of 2024, the company grew revenue by 2% year-over-year to $15.8 billion and increased its generally accepted accounting principles (GAAP) gross profit margin by 180 points base, up to 56.8%.

In addition, IBM’s free cash flow increased by $1.1 billion to $4.5 billion in Q2 2024. These may not be the eye-popping statistics that some members of the Magnificent Seven would give you, 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.