IBM vs ROP: Dividend Comparison
Dividend data as of
International Business Machines Corp (IBM) and Roper Technologies Inc (ROP) are both in the Information Technology sector, making them natural rivals for dividend investors. IBM offers a significantly higher 2.30% yield compared to ROP's 0.97%, a gap of 1.33%. For dividend growth, ROP leads with a 5-year CAGR of 18.2% versus IBM's 8.9%. ROP holds the edge in dividend safety with a "Safe" rating. IBM is a Dividend Aristocrat with 30 years of consecutive increases.
Verdict
Yield Analysis
IBM yields 1.33% more than ROP. In dollar terms, IBM pays $6.71/share vs ROP's $3.38/share annually.
Dividend Growth
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%.
ROP: Dividend growth is accelerating — the 3-year CAGR of 26.9% exceeds the 5-year rate of 18.2% and the 10-year rate of 15.5%.
Dividend Safety
IBM: 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.
ROP: The payout ratio of 23% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.2x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in IBM vs ROP today?
At $263.04 per share, $10,000 buys about 38.0 shares of International Business Machines Corp (IBM). Each share pays $6.71 per year in dividends, so the position starts out generating roughly $255 per year — about $21 a month.
At $321.99 per share, $10,000 buys about 31.1 shares of Roper Technologies Inc (ROP). Each share pays $3.38 per year in dividends, so the position starts out generating roughly $105 per year — about $9 a month.
IBM is the larger income stream from day one: $150 per year more on the same $10,000 invested.
What could $10,000 of IBM or ROP income look like in 10 years?
International Business Machines Corp (IBM) has raised its dividend about 8.9% a year over the past five years. If that pace held, the $230 per year that $10,000 generates today at the current 2.30% yield would reach $538 per year by 2036 — a 5.4% yield on the original cost.
Roper Technologies Inc (ROP) has raised its dividend about 18.2% a year over the past five years. If that pace held, the $97 per year that $10,000 generates today at the current 0.97% yield would reach $518 per year by 2036 — a 5.2% yield on the original cost.
On those trailing rates, IBM pays more in 2036: $538 versus $518 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would ROP's dividend growth overtake IBM's higher yield?
Roper Technologies Inc (ROP) yields less today (0.97% vs 2.30%) but has grown its dividend faster — 18.2% vs 8.9% a year over the past five years. If both trends continued, a $10,000 position in ROP would start out-earning the same position in IBM around 2037 (roughly 11 years from now), paying about $612 per year at the crossover. Before that point, IBM pays more each year; after it, the gap compounds in ROP's favor.
Can IBM and ROP afford their dividends?
International Business Machines Corp (IBM) earns $11.14 per share against $6.71 paid out in dividends — 1.7x coverage (a 60% payout ratio).
Roper Technologies Inc (ROP) earns $14.21 per share against $3.38 paid out in dividends — 4.2x coverage (a 23% payout ratio).
ROP's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for IBM if earnings weaken.
Which fits an early-retirement income portfolio better, IBM or ROP?
For income you need right now, International Business Machines Corp (IBM) leads: $100,000 invested today pays about $192 a month at the current 2.30% yield, versus $81 a month from Roper Technologies Inc (ROP) at 0.97%.
With a decade or more before the income is needed, ROP's faster dividend growth (18.2% vs 8.9% a year) matters more than the starting yield — raises compound into the larger paycheck over time.
On consistency: IBM has raised its dividend 30 consecutive years.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $675/yr in IBM vs $570/yr in ROP by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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