IBM Has Raised Its Dividend for 31 Years. Inflation Is Still Winning
IBM has raised its dividend for three decades straight, but the latest increase fits on a penny. Before counting on that income to keep pace with rising costs, retirees should understand what the streak actually delivers.
The headline is easy to sell. IBM (NYSE:IBM | IBM Price Prediction) has paid consecutive quarterly dividends every year since 1916 and, with the April declaration, notched its 31st consecutive year of dividend increases. The reality a retiree actually banks is smaller. Much smaller.
A Streak That Shrank in Size
The most recent raise took the quarterly payout from $1.68 to $1.69, declared April 22, 2026. That is a penny a quarter, roughly four cents on the annualized rate. Walk the history back and the trajectory is unmistakable:
- 2015: $1.10 to $1.30 (a 20-cent quarterly raise)
- 2013: $0.85 to $0.95
- 2011: $0.65 to $0.75
- 2019: $1.57 to $1.62, then annual pennies since
Five straight one-cent bumps ($1.63, $1.64, $1.65, $1.66, $1.67, $1.68, $1.69) is a streak preserved by rounding.
Peers on the Same Trend, Different Speeds
Cisco Systems (NASDAQ:CSCO) has taken its quarterly from $0.06 in 2011 to $0.42 in 2026, and its latest step was a familiar penny ($0.41 to $0.42). Microsoft (NASDAQ:MSFT) pushed its quarterly from $0.91 to $0.98 in September, on a run from $0.13 in 2010. Oracle (NYSE:ORCL) went from $0.40 to $0.50 in early 2025 and has held there through October 2026. IBM offers the highest yield of the group (2.83%) and the slowest growth.
Is the Payout Safe? Yes. Is It Growing? Barely.
Cash coverage is ample. IBM produced free cash flow of $14.73B in 2025 against a dividend payout of $6.255 billion. CFO Jim Kavanaugh told analysts on the Q2 call, “We returned $3.2 billion to shareholders in the form of dividends through the first half of the year,” and framed cash generation this way: “Over the last four years, we have grown our free cash flow over $6.5 billion in this company and grown free cash flow margin 700 basis points.”
The cash is being redirected. IBM absorbed Confluent and HashiCorp, carries $62 billion in debt, and is committing more than $10 billion to quantum computing over five years. CEO Arvind Krishna said IBM is “in the early innings of a structural shift for business” and pointed to a generative AI book of business of more than $12.5 billion.
Verdict
A one-cent quarterly bump does not clear a 3% cost-of-living increase. With shares down 20.71% year to date at $230.17, the total-return case now leans on the AI reinvestment thesis, not dividend growth. Treat IBM as a fixed-income substitute with an intact streak. Investors expecting real income growth should watch Microsoft.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
