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Is IBM’s Dividend Attractive Enough Despite Slow Growth?

International Business Machines Corporation (NYSE:IBM) is one of the 10 Technology Dividend Aristocrats to Buy in 2025.

Commonly known as Big Blue, International Business Machines Corporation (NYSE:IBM) is an American multinational tech company that offers a wide range of services, including hybrid cloud solutions. It’s considered one of the top dividend-paying companies in the tech sector, thanks to its consistent cash generation, solid yield, and long history of dividend growth. However, the company’s revenue growth has been somewhat uneven, which could be a point of concern for some investors.

A closeup of a woman’s hands typing rapidly on a laptop in a corporate office setting.

On April 30, International Business Machines Corporation (NYSE:IBM) announced a quarterly dividend of $1.68 per share, marking a 0.6% increase from its previous payout. While the bump was modest, it extended the company’s streak of annual dividend increases to 30 consecutive years. This ongoing dividend growth is backed by robust cash flows. In the latest quarter, IBM reported $4.4 billion in operating cash flow and $2 billion in free cash flow, returning $1.5 billion to shareholders through dividends during the same period.

That said, International Business Machines Corporation (NYSE:IBM)’s top-line performance over the past five years hasn’t shown consistent acceleration. Its annual revenue increased from $57.3 billion in 2021 to $62.7 billion in 2024, which is a gradual climb that might fall short of expectations for those seeking rapid dividend hikes. Moreover, the company’s payout ratio over the trailing twelve months stands above 110%, which raises some concerns about the sustainability of its dividends.

Even so, the firm has been increasing its dividends at a more modest pace, likely in line with its cash flow levels and ongoing investment needs. This cautious approach could help preserve its dividend over the long run. Also, the company’s steady dividend payments and a yield of 2.4% provide a sense of reliability and income stability for long-term investors.

While we acknowledge the potential of IBM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Dividend Stocks for a Bear Market and 10 Best Dividend Stocks to Buy for Dependable Dividend Growth.

Disclosure. None.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

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