IBM Is Due for A Dividend Increase in 2016

By | April 25, 2016

The goal of my DGI Portfolio is to grow money and build passive income by investing in companies that pay a stable and increasing dividend. One company that satisfies the criteria and is also a holding in the portfolio is International Business Machines Corp. (NYSE:IBM).

The stock currently pays a dividend of $1.3/quarter, or $5.2/year for a current yield of 3.50% as of April 22, 2016. IBM has a long history of paying dividends and consistently raising the amount every year. Below is a table of the past 5 years of dividend payments.

Ex/Eff Date    Cash Amount
2/8/2016    1.3
11/6/2015    1.3
8/6/2015    1.3
5/6/2015    1.3
2/6/2015    1.1
11/6/2014    1.1
8/6/2014    1.1
5/7/2014    1.1
2/6/2014    0.95
11/6/2013    0.95
8/7/2013    0.95
5/8/2013    0.95
2/6/2013    0.85
11/7/2012    0.85
8/8/2012    0.85
5/8/2012    0.85
2/8/2012    0.75
11/8/2011    0.75
8/8/2011    0.75
5/6/2011    0.75
Source: Nasdaq.com

Based on the previous pattern, IBM should be raising their dividend again in May of this year. The last dividend was increased by 20 cents. If they can keep the same amount increase for this May, that would bring the dividend to $1.50/quarter, or $6/year. Using the stock price of 148.50 on April 22, the new yield will be 4%.

What do you think will be the new dividend amount?

 

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