IBM has steady dividend growth but concerns about sustainability due to high payout ratio

From Yahoo Finance: 2025-06-23 17:19:00

International Business Machines Corporation (NYSE:IBM) is considered one of the top dividend-paying companies in the tech sector due to its consistent cash generation and long history of dividend growth. Despite revenue growth concerns, IBM announced a 0.6% increase in quarterly dividend, marking 30 consecutive years of dividend growth.

IBM’s annual revenue has gradually increased over the past five years, reaching $62.7 billion in 2024. However, its payout ratio stands above 110%, raising concerns about dividend sustainability. The company has been increasing dividends at a modest pace, aligning with cash flow levels and investment needs for long-term dividend preservation.

While IBM offers reliability and income stability with a 2.4% yield, some AI stocks may present greater upside potential with lower downside risk. Investors seeking undervalued AI stocks can explore options beyond IBM. The company’s cautious dividend approach aims to balance cash flow and investment needs for long-term sustainability.



Read more at Yahoo Finance: Is IBM’s Dividend Attractive Enough Despite Slow Growth?