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IBM Assumes Familiar Leadership Role

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May 03, 2009 – Comments (2) | RELATED TICKERS: IBM , SWY , XOM

IBM (IBM), a name once synonymous with blue-chip technology, faced a near-death experience in the early 1990’s when it misjudged the  importance of PCs at a time when demand for mainframes was waning and corporate downsizing was in full swing. IBM has never been able to regain it technology bellwether crown from Microsoft (MSFT) and Intel (INTC), but it has taken steps to regain its leadership role.

Last Tuesday, IBM stood up and was counted as a leader. At a time when the ill-prepared and the fearful are cutting dividends and hoarding cash, IBM increased its quarterly dividend 10% to $0.55/share and announced a $3 billion share repurchase program. The company has increased its quarterly dividend by 175% percent since 2006 and this is the 14th consecutive increase. The dividend is payable June 10, 2009 to stockholders of record May 8, 2009.  based on the new rate, IBM is currently yielding: 2.10%

Below are many other companies joining IBM as leaders andrewarding their shareholders with higher cash dividends:

- Cullen/Frost Bankers (CFR) increased its qtr. dividend 2% to $0.43/share. Yield 3.54% (analysis)

- Donegal Group (DGICA) raised its qtr. dividend to $0.112/share. Yield: 3.07%

- Valmont Industries (VMI) ups its qtr. dividend 15.4% to $0.15/share, Yield: 0.95%

- Bemis (BMS) boosts qtr dividend to $0.225/share. Yield: 3.72%

- Costco Wholesale (COST) increased its qtr dividend to $0.18/share. Yield: 1.50%

- BOK Financial (BOKF) raised its qtr. dividend 6.7% to $0.24/share. Yield: 2.48%

- W.W. Grainger (GWW) ups its qtr. dividend 15% to $0.46/share. Yield: 2.22%

- Talisman Energy (TLM) boosts its semi-annual dividend 12.5% to $0.1125/share. Yield: 1.47%

- ExxonMobil (XOM) increased its qtr. dividend to $0.42/share. Yield: 2.45%

- UGI Corporation (UGI) raised its qtr dividend 4% to $0.20/share. Yield: 3.35%

- Safeway (SWY) ups qtr. dividend 21% to $0.10/share. Yield: 1.56%

- Occidental (OXY) boosts qtr. dividend 3.1% to $0.33/share. Yield: 2.23%

Hopefully, this is just the beginning and in the coming weeks we will continue to see more dividend increases. For more companies with a long string of consecutive dividend increases, see this list.

Full Disclosure: No position in the aforementioned securities.  See a list of all my income holdings here.

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Tags: BMS, BOKF, CFR, COST, DGICA, GWW, IBM, OXY, SWY, TLM, UGI, VMI, XOM

2 Comments – Post Your Own

#1) On May 03, 2009 at 11:43 AM, faclark (< 20) wrote:

IBM is a leader when it comes to dividends, but not according to employees, customers or the general public.  IBM years ago was at the top of the lists of the best companies to work for, but now doesn't makes the top 100. The last time IBM was in the Forbes list of top 100 companies to work for was in 2003 when they came it at number 38. They dropped completely out in 2004 and have not been back.  They dropped out due to cuts in benefits, and due to a fall in the "Trust Index."

They are no longer a leader in terms of benefits.  They have been offshoring US jobs, hiring two workers in places like India and China for every worker they lay off in the US.  In those regards, they are a lagard.

Regarding IBM, I do want to be (and am) a stock holder - but I don't want to be a customer, and I certainly don't want to be an employee.

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#2) On May 03, 2009 at 1:34 PM, JibJabs (90.35) wrote:

Not a customer but a shareholder? Seems foolish.

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