Interactive Brokers (IBKR) has increased its quarterly dividend payment by 71%. The U.S. brokerage and stock trading platform has lifted its distribution to shareholders to $0.15 per share each quarter from $0.0875 previously. The new dividend amount will take the yield on IBKR stock close to 1% from 0.41% currently.
The new dividend is scheduled to be paid on Dec. 14 of this year to shareholders of record as of Dec. 1. This is the second consecutive year that the company has raised its distribution. Interactive Brokers had maintained a modest quarterly dividend payout of $0.025 for several years. Since the end of 2024, the company has raised its quarterly dividend by 500%.
Interactive Brokers’ dividends per share. Source: TipRanks
Interactive Brokers’ Financial Results
The big dividend hike was announced by Interactive Brokers along with its latest financial results. The Connecticut-based company reported financial results for this year’s third quarter that surpassed Wall Street’s expectations. The firm posted earnings per share (EPS) of $0.69, which topped the $0.67 consensus estimate among analysts.
Interactive Brokers’ revenue for the July through September quarter totaled $1.91 billion, which was ahead of the $1.86 billion forecast on Wall Street. Like other brokerage firms, Interactive Brokers has benefited this year from strong trading activity among investors as the stock market hit successive all-time highs.
Signs of Slowing Growth
Management at Interactive Brokers said that customer accounts increased 35% year-over-year in the third quarter to 5.58 million. Total daily average trades on its platform increased 18% to 4.27 million. Additionally, margin loans at Interactive Brokers increased 36% to $105.2 billion. Despite the strong numbers, there are signs of a slowdown taking place at Interactive Brokers.
Customer trading in stocks fell 24% year-over-year in the third quarter while trading in options contracts decreased 1%, said Interactive Brokers. Since the end of August, markets have grown more volatile as crude oil prices and yields on government bonds have risen, pressuring stocks and prompting some investors to move to the sidelines.
Is IBKR Stock a Buy?
Interactive Brokers’ stock has a consensus Strong Buy rating among 12 Wall Street analysts. That rating is based on nine Buy and three Hold recommendations issued in the last three months. The average IBKR price target of $106.64 implies 25% upside from current levels. These ratings could change after the company’s financial results.
