IBM Increases Quarterly Cash Dividend by 50%

Strategic Insights -

IBM declared a regular quarterly cash dividend of $0.30 per common share, a 50% increase from the previous dividend of $0.20 per common share, representing the largest percentage increase in the company's history. This marks the eleventh consecutive year that IBM has increased its quarterly cash dividend, resulting in a total increase of 380% since 1996. Additionally, the board authorized $4 billion in new funds for its stock repurchase program, bringing the total available funds to approximately $6.5 billion.

Key Takeaways:

  • IBM declared a regular quarterly cash dividend of $0.30 per common share, a 50% increase from the previous dividend of $0.20 per common share.
  • The current dividend represents the largest percentage increase in the company's history.
  • This marks the eleventh consecutive year that IBM has increased its quarterly cash dividend, resulting in a total increase of 380% since 1996.
  • The board authorized $4 billion in new funds for its stock repurchase program, bringing the total available funds to approximately $6.5 billion.
  • IBM will repurchase shares on the open market or in private transactions from time to time, depending on market conditions.
  • The payment of the dividend will be made on June 10, 2006, to stockholders of record as of May 10, 2006.
  • IBM has paid 362 consecutive quarterly dividends, starting in 1916.
  • IBM's Treasurer, Jesse Greene, provided a Q&A on the company's dividend and buyback strategy.

Statistics:

  • $0.30 per common share: new quarterly cash dividend
  • 50%: percentage increase in dividend from $0.20 to $0.30 per common share
  • 11 years: consecutive years that IBM has increased its quarterly cash dividend
  • 380%: total increase in dividend since 1996
  • $4 billion: new funds authorized for stock repurchase program
  • $6.5 billion: total available funds for stock repurchase program
  • 2.5 billion: remaining funds for stock repurchase from prior authorization
  • 362: consecutive quarterly dividends paid by IBM, starting in 1916

Sources:

  • IBM press release
  • Business Wire news release
  • IBM investor Web site
  • ASIA PULSE 26-04