After years, International Business Machines Corp. (NYSE: IBM) has financially engineered earnings per share growth, despite no significant revenue growth. This has been achieved through cost cutting and share buybacks. The trajectory of this company has led many investors and analysts alike to question IBM’s capital return policies, but a fresh dividend hike could finally be a step in the right direction for Big Blue.

IBM’s board of directors announced on Tuesday that it has declared a regular quarterly cash dividend of $1.30 per common share. What should stand out to investors is that IBM’s dividend declaration is actually an increase of $0.20 per share. That is up a sharp 18% from the prior quarterly dividend of $1.10 per share.

So, why is an 18% dividend hike finally getting it right?

Well, when IBM raised its dividend to $1.10 from $0.95 a year ago, that was a dividend hike of almost 16%. When the dividend went to $0.95 from $0.85 in 2013, that was a hike of almost 12%. And in 2012, the dividend hike to $0.85 from $0.75 was a payout raise of 13%.

In short, IBM is finally making its dividend growth more attractive than share buybacks.

ALSO READ: 4 Dividends and Buybacks That Should Not Be Ignored

24/7 Wall St. recently covered the U.S. companies with the largest buybacks of all time, which were also still repurchasing their shares today. We noted:

While IBM has used less cash to repurchase stock of late, at the end of December 2014 IBM had approximately $6.3 billion remaining from the current share repurchase authorization and promised to seek higher buyback approvals ahead. After shrinking its float by 8% or so in the past year, IBM has spent well over $160 billion between dividends and buybacks alone since 2000 to return capital to shareholders. Big Blue now has less than a billion shares outstanding.