Wells Fargo sees smaller dividend hike coming from IBM

|By:, SA News Editor

IBM (IBM +0.4%) is expected to boost its dividend again tomorrow at its annual meeting, and Wells Fargo is expecting it to be a 10-cent hike.

That's a 7.1% increase to $1.50/share, analyst Maynard Um notes, but it's a smaller move in dollar terms than years past.

"From an absolute dollar perspective, this would signify an increase of roughly $291 million vs an average increase over the last five years of roughly $357 million (or an average of $288 million excluding the large increase in 2015) and up 5.5% vs the last five year average of 8.7% (7.2% excluding 2015)," Um says.

The $0.10 increas is consisten with last spring's, but smaller than an outsize $0.20 hike in 2015, and $0.15 in 2014.

Given the dividend yield, he believes shares may stay range-bound.