IBM vs ROP: Dividend Yield, Growth & Safety Comparison
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.
Key Metrics Comparison
| Metric | IBM | ROP |
|---|
| Dividend Yield | 2.30% | 0.97% |
| Annual Dividend | $6.71 | $3.38 |
| 5-Year CAGR | 8.9% | 18.2% |
| Payout Ratio | 60% | 23% |
| Consecutive Years | 30 | 0 |
| Price | $263.04 | $321.99 |
Yield Comparison
International Business Machines Corp (IBM) currently yields 2.30%, which is solid for the broader market. That's 1.33% more than Roper Technologies Inc (ROP), which yields 0.97%. In dollar terms, IBM pays $6.71/share annually versus ROP's $3.38/share.
Dividend Growth
Over the past five years, ROP has grown its dividend at a 18.2% CAGR compared to IBM's 8.9%. 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'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. ROP's dividend safety is rated "Safe." The payout ratio of 23% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.2x. ROP's payout ratio of 23% is more conservative than IBM's 60%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in IBM generates approximately $230/year in dividend income, compared to $97/year from ROP — a difference of $133/year. At $100,000, that gap widens to $1330/year.
Verdict
- Best for income: IBM
- Best for growth: ROP
- Best for safety: ROP
Frequently Asked Questions
Which has a higher dividend yield, IBM or ROP?
International Business Machines Corp (IBM) has a higher dividend yield of 2.30% compared to Roper Technologies Inc (ROP) at 0.97%.
Is IBM or ROP a better dividend growth stock?
Roper Technologies Inc has the stronger dividend growth with a 5-year CAGR of 18.2%, compared to International Business Machines Corp's 8.9%.
Which is safer for dividend income, IBM or ROP?
International Business Machines Corp's dividend safety is rated "Moderate" while Roper Technologies Inc is rated "Safe." 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 23% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 4.2x.
How much income does $10,000 in IBM vs ROP generate?
A $10,000 investment in IBM generates approximately $230/year in dividends, while the same amount in ROP generates about $97/year.
Is IBM or ROP a Dividend Aristocrat?
International Business Machines Corp is a Dividend Aristocrat with 30 consecutive years of increases. Roper Technologies Inc does not currently qualify for aristocrat status.
Which has a lower payout ratio, IBM or ROP?
Roper Technologies Inc has a lower payout ratio of 23% compared to International Business Machines Corp's 60%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
IBM vs ROP: which is better for retirement income?
It depends on your priorities. IBM for current income, ROP for dividend growth, ROP for safety. Many retirement investors hold both for diversification.
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