IBM Has Raised Its Dividend for 31 Years. Inflation Is Still Winning

Quick Read

• IBM raised its quarterly dividend a single penny, from $1.68 to $1.69, marking its 31st consecutive increase but delivering just $0.04 more annually to shareholders.

• Microsoft grew its quarterly dividend from $0.13 to $0.98 since 2010, making it the stronger pick for investors seeking real income growth over IBM’s 2.83% yield.

• IBM’s dividend appears safe, with $14.7B in free cash flow comfortably covering its $6.3B payout, though capital is flowing toward acquisitions, $62B in debt, and quantum computing bets.

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The headline is easy to sell. IBM (NYSE:IBM) 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.

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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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