It’s been an interesting couple of days in technology. Big things are happening to some fairly large players that maybe didn’t get the media attention they should. Not that they didn’t get noticed, of course, but perhaps not for all of the right reasons or with the right angle.
The important thing to learn here isn’t the wavelike quality of media coverage but what quick things to look for. Look for good firms with a history of good management. Look for firms that pay dividends and grow them over time. Then make sure to take what a reporter on deadline (I don’t have one, thank goodness) writes. There’s no one sloppier than a reporter covering numbers who has to deliver 8 column-inches in 45 minutes.
Here’s some info on the newsmakers and other dividend-paying tech firms.
Oracle
Oracle Corporation (NASDAQ:ORCL) is making bad news. The company announced that its sales were fairly poor – or at least unexpectedly low – for the last quarter. That’s not good for Oracle Corporation (NASDAQ:ORCL), sure, but because of the nature of financial coverage it’s bad for everyone. Oracle reports early in the earnings cycle, and a bad report from the company triggers a sell-off across the tech sector. This is ludicrous, of course, as companies in the same sector aren’t always exact parallels. It’s just silly.
Oracle Corporation (NASDAQ:ORCL) dropped more than 10% on the news. 10%. This is also just silly, and I’d expect to see some buying of shares by savvier investors wanting to make a quick buck. Even with the decline, Oracle Corporation (NASDAQ:ORCL)’s P/E remains above 15 and in good shape. It also has EPS of $2.12 and tripled (!!!) its dividend in the past year. This is not a wounded firm or one in trouble at all. Oracle Corporation (NASDAQ:ORCL) is still world class and worth your investing dollar.
Hewlett-Packard Company (NYSE:HPQ)
Hewlett-Packard, however, is a firm in trouble. There have been rumors surrounding Hewlett-Packard Company (NYSE:HPQ) for quite a while, and former eBay head Meg Whitman is trying to right the ship. Whether she can do that is still an unknown, but she’s better than many who could be in the role.
Even though dealing with some investor trouble, Hewlett-Packard Company (NYSE:HPQ)’s board managed to get re-elected today and promptly voted to reward investors with a 10% increase in the firm’s dividend. That’s either a strong show of confidence or a quick ‘Thanks!’ to the people who voted them back in. Still,Hewlett-Packard Company (NYSE:HPQ)’s stock curve is confusing. It’s at $22.32 now but was at $23.02 twelve months ago. In that time, however, it dropped to $11.71 and bounced back to being neutral for the year. That’s quite a ride. Hewlett-Packard Company (NYSE:HPQ) is a stock I don’t recommend except for an investor comfortable with a lot of risk.
Apple Inc. (NASDAQ:AAPL)
Apple is another interesting stock that’s being driven by the media. The simple fact is that the death of Steve Jobs put my former brethren in the press into a hungry mood. When Apple Inc. (NASDAQ:AAPL) showed weakness the stories about Apple Inc. (NASDAQ:AAPL) being on the way out began to write themselves.
That causes the stock to tank, and it goes on to be a self-fulfilling prophecy. It’s crap, of course. Apple Inc. (NASDAQ:AAPL) is the same company it was a year ago, and the purported weakness isn’t worth getting worked up over.
Yes, the stock tanked. But I continue to believe that’s a temporary thing caused by some bad press and the American need to tear down our heroes. Apple Inc. (NASDAQ:AAPL) is a sound investment that has a great EPS at 44.10 and finally – after some investor pressure – pays a pretty good dividend yield of 2.34%. I’d advise you to get some while it’s low. I don’t think you’ll regret it.
Microsoft Corporation (NASDAQ:MSFT)
Boring, stodgy and effective. Microsoft Corporation (NASDAQ:MSFT) is the very definition of a tech firm in a gray flannel suit. You know what? Boring and stodgy and effective is what you WANT in a company. No one would ding General Mills, Alcoa or Wal-Mart for being that way. They just make money without a lot of flash. But in the tech sector there’s some sort of silly notion that if you don’t behave immodestly you must be a bad investment.
Microsoft Corporation (NASDAQ:MSFT) continues to be a great investment. The firm’s stock took a bit of a dive back in November when its board raised the dividend 15% – to a yield of 3.27% – but I don’t see that as a bad thing. And the company has two pretty good products out there in the Windows 8 Phone and the Surface tablet computer. I think Microsoft Corporation (NASDAQ:MSFT)is investable for both the short and long term.
International Business Machines Corp. (NYSE:IBM)
OK, I lied. THIS is the firm in the gray flannel suit. International Business Machines Corp. (NYSE:IBM) is so mature that there wasn’t high tech when it matured. Heck, I’m not even sure you could call what it did medium-tech when it started. Still, through the years it’s done a good job of making money. Just because you don’t buy its products in Wal-Mart doesn’t mean it’s not selling them where it counts: at the enterprise level.
Even discounting the unpleasantness of the recession, International Business Machines Corp. (NYSE:IBM)’s stock has grown over the last 10 years from $80.85 to a recent high of $212.26. I can live with that given the chaos that the financial crisis caused. Through all of that it paid and raised its dividend. Since 2008 it raised its dividend four times, each time by a dime. It also has a P/E of just under 15 and an EPS of 14.41. If you want a good, stable tech firm this is one to think about.
The important thing here is to remember not to be too influenced by what you see in the press. If you’re reading this, you’re the type of investor who seeks out information. That’s good. But don’t allow yourself to be overly influenced by it without doing a lot of extra research. Always back up your investment decisions with a solid strategy and don’t make snap decisions.
The article Apple, Oracle, HP and Technology Dividend Payers originally appeared on Fool.com and is written by Nate Wooley.
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