IBM Boosts Dividend, Plans Buyback

International Business Machines Corp.’s board on Tuesday approved raising the company’s common stock dividend by 14% and said it would buy back up to $3.5 billion of the shares.

The world’s biggest computer company said it would raise its quarterly payout to stockholders to 40 cents per common share from 35 cents. A year ago, IBM raised its dividend 40%.

The actions, intended to boost the value of IBM shares, were announced at the company’s annual meeting in Dallas. IBM stock rose 5%, or $8 per share, to close at $158.375 amid a big rally on the New York Stock Exchange.

Shareholders at the meeting were voting on an IBM board proposal to split its stock for the first time in 17 years. Assuming the stock split is approved, IBM’s quarterly dividend increase will amount to 20 cents per share.

The split will double the number of IBM shares outstanding but halve their value. The new shares will be distributed June 10 to shareholders of record May 9.

IBM’s stock buyback matches its previous repurchase announcement of $3.5 billion in November. Not including Tuesday’s planned repurchase, IBM has bought back more than $13.2 billion of its stock in the last two years.

IBM said it plans to buy the stock on the open market, depending on market conditions.