IBM dividend: payments, cash cover and yield
IBM's dividend starts at the $1.69 quarterly rate, or $6.76 annualized. IBM's 2025 shareholder payments were 63.5% of its cash measure, while acquisitions pushed spending beyond internally generated cash.
How much does IBM pay in dividends?
Dividends start from the $1.69 quarterly rate, or $6.76 annualized. The base case reaches $6.80 in 2027 and $7.12 in 2029, close to the recent modest growth pattern. The bear case freezes the dividend at $6.76. The bull case reaches $7.56 as cash conversion improves. The long payment record supports increases, but debt, acquisitions and flat first-half free cash flow limit them.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Dividends per share | 6.80 (6.76 / 6.84) | 6.96 (6.76 / 7.20) | 7.12 (6.76 / 7.56) |
Is IBM's dividend covered by its cash?
Dividends were the steadiest destination. Cash dividends rose from $5,869 million in 2021 to $6,255 million in 2025. Shareholder payments reached $7,273 million in 2025, or 63.5% of the cash measure. IBM also suspended discretionary share repurchases after the Red Hat acquisition; the $1,018 million classified as buybacks in 2025 represented employee tax withholding, not a return to market purchases.
Acquisitions pushed spending beyond internally generated cash. IBM spent $8,294 million on acquisitions in 2025 alongside $7,273 million of shareholder payments, so it issued debt while preserving the dividend. Cash and short-term investments rose from $7,250 million in 2021 to $14,417 million in 2025. Total debt also rose from $51,704 million to $61,260 million. IBM kept liquidity, but did not achieve sustained net-debt reduction.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 11,455 | 11,760 | 12,121 | 8,463 | |
| − Dividends paid | 6,255 | 6,147 | 6,040 | 5,948 | 5,869 |
| − Share buybacks | 1,018 | 651 | 402 | 407 | 319 |
| − Acquisitions | 8,294 | 3,289 | 5,082 | 2,348 | |
| Paid to shareholders | 7,273 | 6,798 | 6,442 | 6,355 | 6,188 |
| Paid out, % of free cash flow | 63.5% | 57.8% | 53.1% | 75.1% |
What is IBM's dividend yield today?
The 5.4% free-cash-flow yield measures cash generation against market value. IBM’s definition excludes changes in financing receivables, and selling receivables can bring cash forward. The 3.0% dividend yield is part of that cash story, not an extra return to add to it; dividends distribute cash the business has generated.
| Today (Oct 13, 2026) | |
|---|---|
| Share price | 227.02 |
| Dividend yield (calculated) | 3.0% |