Technology in the form of electronics and computer hardware are now pervasive throughout our daily life. There is widespread interest in this technology as well as the companies that provider this technology. New gadgets and the latest and best versions of our favorite smart phones, laptops, or tablets often draw our attention. Tech is now even integrated into fashion our fashion choices as we’ve seen with the introduction of Google Glass and soon the smart watch (whomever gets there first since rumours have many companies in this sector).
The technology integration is even bigger with corporations. The post offices are seeing the massive change in letter and package delivery.
- Letters are going down because electronic mail can reach out many but you can also sign many forms online now. I can get many of my statements online as well as the annual financial reports.
- Packages are up because online buy is up. Consumers and companies are purchasing online and receiving their products by delivery.
Some technology stocks can offer attractive yields for dividend investors. After several years and countless hours of dividend research under my belt; I have seen different technology companies mature and offer dividends back to their investors. And although it has been around for a few decades, the tech sector is not as mature as many other sectors. This means that is has not yet surfaced a dividend aristocrat. IBM is the only outlier, it has an impressive one hundred years of dividends. Only IBM, Microsoft and Intel are on the path of dividend aristocracy. They will fall into this category if they can keep up with their dividend increases for at least another decade. That’s a long to wait. But like they say, patience is a virtue :)
Below is a short summary of a few top technology companies currently paying dividends to shareholders. This list is sorted by market capitalization. These companies listed below are the ones I track and I monitor. I found these stocks using my stock screening method.
|Ticker||Quote||Market Cap||P/E||EPS||Yield||Payout Ratio||Value Metric|
Apple – AAPL
It goes without saying that Apple doesn’t need any introduction. :) This tech juggernaut recently came up on my radar. The stock is now of great interest to dividend investors; as it recently started paying a dividend. It has a decent 2.45% yield. There have been some rumours in the news of a possible increase, in which case the yield could be even better. Unfortunately, Apple doesn’t have a history of paying dividends. And everything hinges on their cash balance. Dividends could be increased or shares could be re-purchased. Both are good for investors but unless you have a Magic 8 Ball, it’s impossible to know exactly what will happen. A lot of their future growth is based on their innovation.
IBM – IBM
International Business Machine, or IBM, has been able to reinvent themselves over the years into a service provider. It still operates in the chips and mainframe sectors but their business is mostly around services. IBM increased dividend to $0.85 per share back in April 2012. As mentioned earlier, IBM has paid a dividend for over one hundred years! The company has increased dividends for the seventeen years running. Buffett recently bought some shares in IBM if that matters to you :)
Microsoft – MSFT
It’s hard to believe, but Microsoft has been around for almost forty years. Many of us grew up using their products from the Windows operating system. Even if you aren’t a fan of Microsoft, chances are you are you have used Excel or other software from their Microsoft Office Suite. Some might consider MSFT to be a company that is now past its prime, without much new innovation recently. The company has paid a dividend since 2003. At this rate and based on the cash they generate, I expect MSFT will be a future dividend aristocrat someday.
Intel – INTC
Intel still dominates the PC processor space but has been slow to enter the tablet and smartphone markets. Still, Intel has paid a dividend since 1992. A look at dividend payout history show that the yield has increased nicely over the past decade. Keep an eye out for how well Intel is able to make the transition into the mobile and tablet markets as PC sales continue their decline. While MSFT has competition, none of it is as stiff as the competition Intel has faced in the mobile and tablet market. The personal usage landscape has definitely changed and shown that there are devices for consuming content and others for productivity. As DELL has seen, consumers are flocking to the consuming devices where Intel has little exposure and businesses is where the money is for desktops. Are there any correlation between DELL and Intel?
Oracle – ORCL
This tech giant is a relative newcomer to the dividend-paying list. It started paying out in 2009. CEO Larry Ellison is known for looking out for dividend investors. Last year CNN reported that the company moved up dividend payments in order to help shareowners avoid potential tax increases. Oracle generates a massive amount of cash from government contracts but it missed the boat on cloud computing and must catch up. I would summarize Oracle as a cash generator looking for a way to keep up with innovations.
Texas Instruments – TXN
Texas Instruments has a solid thirteen years of dividend payment history. The Dallas-based semiconductor manufacturer has been in business since 1930. TXN just recently upped their dividend per share and has steadily increased dividend payments since 2000. When I think Texas Instruments, I think calculator. Elementary schools still require a calculator but everyone else has a smartphone with a calculator :) As an investor, you’ll need to look at the businesses they provide semi-conductors for and assess how they fit in your portfolio and their long-term viability. The company is quite large at $39B and it warrants attention.
Seagate Technology – STX
This Irish data storage device company has a ten-year dividend paying track record. Its payout was erratic at first but has increased at a steady pace for the past six years or so. A recent history of stock buyback have increased dividend yield. The storage business is not going away with all the cloud computing initiatives and big data requirements. Cramer recently highlighted the company and its dividends from a valuation with a P/E of 4.81. Storage is a requirement for everything digital now and it has to be bigger and faster.
Do tech stocks fit in your portfolio?
Any of these dividend-paying technology stocks could be a good addition to your portfolio based on your diversification need. Look for new dividend paying stocks to emerge as the tech industry continues to mature and grow.
DISCLOSURE: Please note that I may have a position in one or many of the holdings listed. For a complete list of my holdings, please see my Dividend Portfolio.