CDW Just Raised Its Dividend 8%. Is This Tech Stock a Hidden Gem?
After years of raises so small they barely registered, CDW just delivered a bigger check, but rising debt and shrinking margins complicate the story. Retirees weighing a spot on their dividend list should look past the headline number.
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CDW (NASDAQ:CDW | CDW Price Prediction) raised its quarterly dividend 8% to $0.68 per share on November 4, 2026. The raise came the same morning the company posted third-quarter results that topped estimates on both lines. The dividend is payable Dec 10, 2026 to holders of record Nov 25. For investors at or near retirement, the question is whether this IT reseller belongs on a dividend-growth short list.
An 8% Raise After Years of Token Bumps
CDW lifted its payout every year, but the size of each raise decreased significantly before this one.
| Declared | Quarterly Dividend |
|---|---|
| Nov 2021 | $0.50 |
| Nov 2022 | $0.59 |
| Nov 2023 | $0.62 |
| Oct 2024 | $0.625 |
| Nov 2025 | $0.63 |
| Nov 2026 | $0.68 |
The 2024 and 2025 raises came in under 1% each. Over five years, the payout has grown at roughly 6.3% annually. Earlier this year, CDW cited twelve consecutive years of dividend increases.
Earnings Growth Is Funding the Bigger Check
Non-GAAP EPS came in at $3.26, above the $2.98 estimate. Revenue rose 17.7% to $6.75B, and Financial Services sales jumped 73.2%. Chair and CEO Chris Leahy credited AI demand:
“CDW delivered robust third-quarter results, powered by broad-based strength across our diverse customer end-markets and strong momentum in enterprise AI adoption.”
On the call, she pointed to longer-term economics: “Over the past five years, gross profit has increased at more than twice the rate of net sales.”
Coverage is comfortable. The annualized $2.72 equals about 27% of 2025 EPS of $10.02, and CDW targets 25% of trailing non-GAAP net income. On the Q3 diluted share count, the dividend costs roughly $342 million a year against 2025 free cash flow of $1.088B. Q3 adjusted free cash flow exceeded $500 million.
Debt and Margins Deserve a Closer Look
Total debt climbed to $7,124.3M from $5,628.8M a year earlier. Gross margin contracted to 20.5% from 21.9% as lower-margin hardware gained share of the mix, and workplace optimization charges rose to $31.0M.
How CDW Stacks Up Against Connection and Insight
Connection (NASDAQ:CNXN) lifted its quarterly dividend to $0.20 from $0.15, a 33% jump, while its gross margin fell 110 basis points on the same hardware mix shift. Insight Enterprises (NASDAQ:NSIT) pays no dividend and bought back $150 million of stock in the first half. CDW sits in the middle, combining a formula-driven dividend with buybacks and $1,032 million of remaining authorization.
Verdict: A Real Dividend Grower With a Thin Yield
At $168.75, CDW yields about 1.6%. Retirees who need current income will find that modest. Shares rose 26.6% over the past month but sit 2.35% lower than five years ago.
Yes, CDW is an overlooked dividend growth stock. Its payout policy is tied directly to earnings, so as long as Leahy’s goal of beating the U.S. IT market by 200 to 300 basis points holds, raises should keep coming. For now, the case rests on dividend growth, with a modest starting yield. Watch the stock’s gross margin trend and debt load in the next earnings report.
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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.
