IBM raises dividend, buys back more shares

NEW YORK - IBM is increasing its dividend payout by 18 per cent and buying back more of its stock, offering more signals of confidence in the technology industry's rebound.

The company said yesterday at its annual shareholders meeting, held this year in Milwaukee, that it was raising the quarterly dividend payout to 65c a share. It had been 55c a share for the past four quarters.

IBM has developed a habit of announcing dividend increases at its shareholder meetings.

The per-share payout has more than tripled since 2006.

IBM, which is based in Armonk, New York, also said its board had authorised the use of US$8 billion ($11 billion) for buying back its stock.

The company now has US$10 billion available for that purpose.

IBM has bought back more than US$100 billion of its stock since 1995. The company says it still has plenty left over to invest in its businesses.

"This company, as a result of the investments made over the past eight years, has become very profitable, with substantial cash flow," IBM's Jesse Greene, vice-president for financial management, said in an interview.

"We have the cash to make investments for the future and return cash to our investors."

Greene noted that IBM, which brought in more than US$95 billion in revenue in 2009, continued to put its usual US$6 billion a year into research and development even during the recession.

IBM's decision to return more cash to shareholders provides another sign of confidence from the technology sector as it rebounds from the recession.

Last week IBM increased its profit forecast for this financial year to US$11.20 per share.

- AP