IBM vs QCOM: Dividend Yield, Growth & Safety Comparison
International Business Machines Corp (IBM) and Qualcomm Inc/De (QCOM) are both in the Information Technology sector, making them natural rivals for dividend investors. Both stocks offer similar yields — IBM at 2.30% and QCOM at 2.51%. For dividend growth, IBM leads with a 5-year CAGR of 8.9% versus QCOM's 7.0%. Both stocks carry a "Moderate" dividend safety rating. IBM is a Dividend Aristocrat while QCOM is a Dividend Contender.
Key Metrics Comparison
| Metric | IBM | QCOM |
|---|
| Dividend Yield | 2.30% | 2.51% |
| Annual Dividend | $6.71 | $3.52 |
| 5-Year CAGR | 8.9% | 7.0% |
| Payout Ratio | 60% | 71% |
| Consecutive Years | 30 | 23 |
| Price | $263.04 | $140.78 |
Yield Comparison
Qualcomm Inc/De (QCOM) currently yields 2.51%, which is solid for the broader market. That's 0.21% more than International Business Machines Corp (IBM), which yields 2.30%. In dollar terms, QCOM pays $3.52/share annually versus IBM's $6.71/share.
Dividend Growth
Over the past five years, IBM has grown its dividend at a 8.9% CAGR compared to QCOM's 7.0%. IBM: Dividend growth is accelerating — the 3-year CAGR of 16.1% exceeds the 5-year rate of 8.9% and the 10-year rate of 5.9%. QCOM: Dividend growth is slowing — the 3-year CAGR of 5.7% trails the 5-year rate of 7.0% and the 10-year rate of 6.1%.
Dividend Safety
IBM's dividend safety is rated "Moderate." The payout ratio of 60% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x. QCOM's dividend safety is rated "Moderate." The payout ratio of 71% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x. IBM's payout ratio of 60% is more conservative than QCOM's 71%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in QCOM generates approximately $251/year in dividend income, compared to $230/year from IBM — a difference of $21/year. At $100,000, that gap widens to $210/year.
Verdict
- Best for income: QCOM
- Best for growth: IBM
- Best for safety: IBM
Frequently Asked Questions
Which has a higher dividend yield, IBM or QCOM?
Qualcomm Inc/De (QCOM) has a higher dividend yield of 2.51% compared to International Business Machines Corp (IBM) at 2.30%.
Is IBM or QCOM a better dividend growth stock?
International Business Machines Corp has the stronger dividend growth with a 5-year CAGR of 8.9%, compared to Qualcomm Inc/De's 7.0%.
Which is safer for dividend income, IBM or QCOM?
International Business Machines Corp's dividend safety is rated "Moderate" while Qualcomm Inc/De is rated "Moderate." The payout ratio of 60% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.7x. The payout ratio of 71% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.4x.
How much income does $10,000 in IBM vs QCOM generate?
A $10,000 investment in IBM generates approximately $230/year in dividends, while the same amount in QCOM generates about $251/year.
Is IBM or QCOM a Dividend Aristocrat?
International Business Machines Corp is a Dividend Aristocrat (30 years) and Qualcomm Inc/De is a Dividend Contender (23 years).
Which has a lower payout ratio, IBM or QCOM?
International Business Machines Corp has a lower payout ratio of 60% compared to Qualcomm Inc/De's 71%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
IBM vs QCOM: which is better for retirement income?
It depends on your priorities. QCOM for current income, IBM for dividend growth, IBM for safety. Many retirement investors hold both for diversification.
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