In this article, we will be taking a look at 10 tech stocks that pay dividends. To skip our detailed analysis of dividend investing, you can go directly to see the 5 Tech Stocks that Pay Dividends.
The technology sector has been, and continues to be, one of the most fast-paced and innovative areas of the economy. Hence, stocks like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC) among others remain among the top stocks invested in, with much to offer to shareholders. Even apart from typical blue-chip tech stocks, many other technology stocks can offer attractive returns and often even alluring dividends to shareholders, despite the fact that tech stocks, like stocks in the medical sector, are known for their tendency to reinvest in their own growth and operations rather than paying out large amounts of their earnings to shareholders in the form of dividends. As such, investing in the technology sector can be a smart investment choice for those looking to invest in innovative sectors while diversifying their investment portfolios.
To justify the claims made above, let’s look at what the technology market in the United States has to offer to investors and others in the aftermath of the pandemic. According to Forrester, the outlook for the US tech market is steadily becoming more optimistic, as 2021 progresses and vaccination rates rise, resulting in the reopening of businesses and the recovery of the economy. For instance, the US economy was estimated to be able to grow by about 6% by the end of 2021. And while initially, Forrester had claimed that the US tech budget would only increase by 6% in 2021 and 6.8% in 2022, in a more recent report, it has been claimed that the budget growth would reach 7.4% in 2021 and 6.7% in 2022 instead.
To add on to the above, it has also been estimated that all types of technology sector budgets will witness growing demand this year and the next, with rising spending on technology. Software spending alone, for instance, is expected to be the strongest, growing to almost 10% this year and over 11% in 2022. For investors, however, what may be of more interest is the fact that analysts are growing more optimistic about tech stocks as 2021 moves ahead. Dan Ives, an analyst at Wedbush Securities, was reported to have commented that technology stocks have an upward 25-30% move for the remainder of 2021. Tech stocks have generally also been performing well in the market, albeit not reaching or surpassing the performance of the S&P 500 just yet. By April, these stocks were up 6% when measured by the S&P 500 Information Technology Index, compared to an 8.5% for the S&P 500 generally. Regardless, the outlook for the sector seems positive for all those cultivating an interest in investing in technology.
Investing has become difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Without further ado, let’s take a look at the 10 tech stocks that pay dividends.
Our Methodology
We have selected technology stocks that have dividend yields of 1% and above, and Dividend Risk Scores of C and above on Sure Dividend‘s Analysis Research Database. Insider Monkey tracks the data of about 873 hedge funds, and we have also used this data to pick dividend stocks that are highly popular among hedge funds today. For each stock we have mentioned its yield and the number of hedge funds holding a stake in it, ranking them from the lowest to the highest dividend yield. Finally, we have used analysts’ ratings to determine which stocks are favorably placed in analyst and investor circles, picking stocks with mostly positive ratings and strong fundamentals.
Tech Stocks that Pay Dividends
10. Computer Services, Inc. (OTC: CSVI)
Number of Hedge Fund Holders: N/A
Dividend Yield: 1.8%
Computer Services, Inc. (OTC: CSVI) is an IT service management company that is based in Kentucky, United State, and was founded in 1965. The company ranks 10th on our list of tech stocks that pay dividends.
In the fiscal first quarter of 2022, Computer Services, Inc. (OTC: CSVI) had an EPS of $0.52, beating the previous quarter’s EPS of $0.52. The company’s revenue was $57.86 million, up 11.43% year over year and beating previous quarter’s revenue of $6.01 million.
Like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC), Computer Services, Inc. (OTC: CSVI) is a good stock to invest in.
9. QUALCOMM Incorporated (NASDAQ: QCOM)
Number of Hedge Fund Holders: 72
Dividend Yield: 1.88%
QUALCOMM Incorporated (NASDAQ: QCOM), an information technology company, works to develop and commercialize foundational technology and products used in mobile devices and wireless products. The company ranks 9th on our list of tech stocks that pay dividends.
This August, Canaccord raised its price target on shares of QUALCOMM Incorporated (NASDAQ: QCOM) from $200 to $225. The firm also reiterated a Buy rating on the stock.
In the fiscal third quarter of 2021, QUALCOMM Incorporated (NASDAQ: QCOM) had an EPS of $1.92, beating estimates by $0.24. The company’s revenue was $8 billion, up 63.5% year over year and beating estimates by $431.67 million. QUALCOMM Incorporated (NASDAQ: QCOM) has gained 5.82% in the past 6 months and 23.94% in the past year.
By the end of the second quarter of 2021, 72 hedge funds out of the 873 tracked by Insider Monkey held stakes in QUALCOMM Incorporated (NASDAQ: QCOM) worth roughly $4.04 billion. This is compared to 73 hedge funds in the previous quarter with a total stake value of approximately $2.8 billion.
Like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC), QUALCOMM Incorporated (NASDAQ: QCOM) is a good stock to invest in.
ClearBridge Investments, an investment management firm, mentioned QUALCOMM Incorporated (NASDAQ: QCOM) in its first-quarter 2021 investor letter. Here’s what they said:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurt wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
8. SAP SE (NYSE: SAP)
Number of Hedge Fund Holders: 17
Dividend Yield: 1.9%
SAP SE (NYSE: SAP), a software company based in Germany, is a multinational corporation working to develop enterprise software to manage business operations and customer relations. The company ranks 8th on our list of tech stocks that pay dividends.
This August, Oppenheimer placed an Outperform rating on shares of SAP SE (NYSE: SAP), alongside a price target of $155.
In the second quarter of 2021, SAP SE (NYSE: SAP) had an EPS of $2.06, beating estimates by $0.59. The company’s revenue was $7.87 billion, beating the previous quarters revenue of $7.63 billion. SAP SE (NYSE: SAP) has gained 19.59% in the past 6 months and 15.13% year to date.
By the end of the second quarter of 2021, 17 hedge funds out of the 873 tracked by Insider Monkey held stakes in SAP SE (NYSE: SAP) worth roughly $1.6 billion. This is compared to 19 hedge funds in the previous quarter with a total stake value of approximately $1.5 billion.
Like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC), SAP SE (NYSE: SAP) is a good stock to invest in.
Polen Capital, an investment management firm, mentioned SAP SE (NYSE: SAP) in its second-quarter 2021 investor letter. Here’s what they said:
“During the second quarter, the leading absolute contributors to performance (includes) SAP. German enterprise software company SAP was a leading contributor to Portfolio returns in the quarter. Over the last six months, SAP rolled out a new simplified commercial offering aimed at making it easier for their customers to transition their core enterprise resource planning software to the cloud. “Rise with SAP” will encourage customers to consider moving certain workloads to new cloudenabled software. In many cases, SAP customers standardized business processes on SAP software over decades. Contemplating and enacting transformational change is a huge undertaking for these customers. Historically, transitioning to the cloud involves many third-party helpers, so having a single, trusted partner to lead the conversation, design the road map, and own the execution is helpful. Further, as customers shift to the cloud, more peripheral workloads can be handled by SAP, thereby potentially increasing the scale of its relationship with certain customers. Not all legacy customers will adopt SAP’s cloud software, but there could be meaningful performance benefits (quicker innovation, more agility, and mobility, etc.) and cost savings for those that do.
In addition, new customers are coming aboard the SAP cloud platform, which we view as a testament to its leading capabilities. This initiative could drive cloud software revenue growth greater than 20% in the coming years, some of which will cannibalize existing onpremise software sales. That said, the potential net result is attractive and durable growth. We think SAP is capable of doubledigit earnings growth over the coming five-year period.”
7. Texas Instruments Incorporated (NASDAQ: TXN)
Number of Hedge Fund Holders: 50
Dividend Yield: 2.14%
Texas Instruments Incorporated (NASDAQ: TXN), an American semiconductor manufacturing and technology company based in Dallas, Texas, works to design and manufacture semiconductors and integrated circuits. The company ranks 7th on our list of tech stocks that pay dividends.
Raymond James just this July raised its price target on shares of Texas Instruments Incorporated (NASDAQ: TXN) from $220 to $230. The firm also reiterated an Outperform rating on the stock.
In the second quarter of 2021, Texas Instruments Incorporated (NASDAQ: TXN) had an EPS of $2.1, beating estimates by $0.25. The company’s revenue was $4.58 billion, up 41.4% year over year and beating estimates by $221.67 million. Texas Instruments Incorporated (NASDAQ: TXN) has gained 8.01% in the past 6 months and 18.3% year to date.
By the end of the second quarter of 2021, 50 hedge funds out of the 873 tracked by Insider Monkey held stakes in Texas Instruments Incorporated (NASDAQ: TXN) worth roughly $2.5 billion. This is compared to 42 hedge funds in the previous quarter with a total stake value of approximately $2.5 billion.
Like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC), Texas Instruments Incorporated (NASDAQ: TXN) is a good stock to invest in.
ClearBridge Investments, an investment management firm, mentioned Texas Instruments Incorporated (NASDAQ: TXN) in its first-quarter 2021 investor letter. Here’s what they said:
“Analog chipmaker Texas Instruments, meanwhile, benefited from better inventory management than peers. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
6. Cisco Systems, Inc. (NASDAQ: CSCO)
Number of Hedge Fund Holders: 60
Dividend Yield: 2.51%
Cisco Systems, Inc. (NASDAQ: CSCO) is a networking hardware company based in the US and operating internationally to manufacture, develop, and sell networking hardware, software, telecommunications equipment and other high-tech services and products. The company ranks 6th on our list of tech stocks that pay dividends.
This August, Deutsche Bank raised its price target on shares of Cisco Systems, Inc. (NASDAQ: CSCO) from $55 to $59, while also reiterating a Hold rating on Cisco Systems, Inc. (NASDAQ: CSCO) shares.
In the fiscal fourth quarter of 2021, Cisco Systems, Inc. (NASDAQ: CSCO) had an EPS of $0.84, beating estimates by $0.01. The company’s revenue was $13.13 billion, up 8% year over year and beating estimates by $86.74 million. Cisco Systems, Inc. (NASDAQ: CSCO) has gained 28.16% in the past 6 months and 33.87% year to date.
By the end of the second quarter of 2021, 60 hedge funds out of the 873 tracked by Insider Monkey held stakes in Cisco Systems, Inc. (NASDAQ: CSCO) worth roughly $4.2 billion. This is compared to 59 hedge funds in the previous quarter with a total stake value of approximately $5.2 billion.
Like Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Amazon.com, Inc. (NASDAQ: AMZN), and Intel Corporation (NASDAQ: INTC), Cisco Systems, Inc. (NASDAQ: CSCO) is a good stock to invest in.
ClearBridge Investments, an investment management firm, mentioned Cisco Systems, Inc. (NASDAQ: CSCO) in its first-quarter 2021 investor letter. Here’s what they said:
“Also in IT, we added Cisco Systems, which provides IT and networking services in the form of network security, software development and cloud computing. Cisco continues to derive over 50% of its sales from on-premise deployments of its products of enterprise and small and midsize customers, while recurring revenues from software are becoming a larger part of the mix. Return-to-office enterprise spending should offer upside to its core campus business. Cisco was an early technology leader in sustainability over two decades ago, through its Internet-connecting capabilities which supported live concerts in partnership with the United Nations Development Program to raise awareness and funds to fight poverty. Cisco has very strong environmental standards (including driving lower energy consumption in IT departments through new product innovations and a longstanding goal to reduce emissions and reliance on non-renewable energy sources). Its data privacy and supply chain management policies are best in class.”
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Disclosure: None. 10 Tech Stocks that Pay Dividends is originally published on Insider Monkey.
