For the 15th year in a row IBM (NYSE:IBM) has upped its quarterly dividend, this time by 18 percent. The company also announced it is looking at buying back about $8 of its stock.
The current quarterly dividend of 55 cents a share has now been increased to 65 cents a share.
Concerning the share buyback of close to $8 billion, that comes on the heels of an ongoing buyback program of $2 billion started in March. IBM added they're looking at buying back even more stock in October.
All of this is before the company's annual shareholder meeting scheduled for Tuesday. It seems it was done to generate some excitement in the company and to show the leadership is confident about their future prospects.
This is the seventh year in a row IBM has increased their dividend by double-digits.
While this is already being hailed as confirmation that the tech sector is rebounding along with the economy, that isn't really true at all.
It's more a reflection of the strength of IBM as a standalone business than it is of the economy. The focus over the last decade by IBM in the services and software sector is what has been behind their ability to generate better profits, as they have moved away from the much less lucrative computer hardware sector.
Even so, in their last quarterly report the company said there was a decline in the number of service contracts signed by companies, showing they're still very cautious about committing capital in an ongoing risky environment.
Dividends will be payable June 10 to shareholders of record as of May 10.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com