International Business Machines Corporation (IBM) develops and manufactures information technologies, including computer systems, software, networking systems, storage devices, and microelectronics worldwide. IBM is a major component of the S&P 500, Dow Industrials and the Dividend Achievers Indexes. IBM has been consistently increasing its dividends for 13 consecutive years. From the end of 1998 up until December 2008 this dividend growth stock has delivered a zero annual average total return to its shareholders. 
At the same time company has managed to deliver a 9.00% average annual increase in its EPS since 1999.
The ROE has remained largely between 25% and 40%, with the exception on 2008. 
Annual dividend payments have increased by an average of 16.80% annually since 1999, which is much higher than the growth in EPS.
A 17% growth in dividends translates into the dividend payment doubling almost every four years. Since 1997 IBM has actually managed to double its dividend payment almost every 5 years.
The dividend payout increased slightly for the majority of our study period, by rising from 11% in 1999 to 21% in 2008. A lower payout is always a plus, since it leaves room for consistent dividend growth minimizing the impact of short-term fluctuations in earnings.
IBM is not yet attractively valued. The stock trades at a price/earnings multiple of 10.7, and has a low DPR. However the current dividend yield is below the 3% minimum threshold that I have set. As a dividend growth holding IBM is a buy on dips below $67. Big Blue has cut its dividend previously in 1993.
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