10 Best Innovative Stocks that Pay Dividends

7. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 54

International Business Machines Corporation (NYSE:IBM) ranks seventh on our list of the best innovative stocks that pay dividends. The multinational tech company, initially recognized for its punch card machines, smoothly transitioned to digital computers as they emerged as the new technological standard. Over time, it achieved major advancements in software, computer memory, databases, personal computers, and, more recently, cognitive computing. These pioneering innovations laid the groundwork for the development of billion-dollar enterprises.

Today, International Business Machines Corporation (NYSE:IBM) is concentrating on two main technologies: artificial intelligence (AI) and cloud computing. Since CEO Arvind Krishna assumed leadership in 2020 and refocused the company on these areas, it has experienced a consistent increase in revenue. The company is currently unique in offering a comprehensive technology stack through its Watsonx platform, along with consulting services for the implementation and management of generative AI. While the stock did not perform exceptionally well over the past decade, its strong potential in the AI sector is driving impressive returns this year. Since the start of 2024, the stock has surged by 32.5%, and in the past year, it returned nearly 48%.

In the second quarter of 2024, International Business Machines Corporation (NYSE:IBM) reported revenue of $15.7 billion, which showed a 2% growth from the same period last year. The revenue also beat analysts’ expectations by $147 million. The company exhibited strong cash generation performance. In the first six months of the year, it generated $6.2 billion in operating cash flow and its free cash flow amounted to $4.5 billion. Based on the results from the first half of the year, the company is increasing its full-year forecast for free cash flow, now anticipating it will exceed $12 billion.

On July 29, International Business Machines Corporation (NYSE:IBM) declared a quarterly dividend of $1.67 per share, which was in line with its previous dividend. The company has been rewarding its shareholders with growing dividends for the past 29 years consistently. Moreover, in the most recent quarter, it returned $1.5 billion to investors in dividends. The stock supports an impressive dividend yield of 3.12%, as of September 18.

Insider Monkey’s database of Q2 2024 indicated that 54 hedge funds owned stakes in International Business Machines Corporation (NYSE:IBM), growing from 49 in the previous quarter. These stakes have a total value of $837.5 million. Cliff Asness’ AQR Capital Management was the company’s leading stakeholder in Q2.