Microsoft Corporation (MSFT), Cisco Systems, Inc. (CSCO), CA, Inc. (CA): Three Technology Stocks for Solid Dividends

CA Dividend Profile

CA, Inc. (NASDAQ:CA) is a provider of enterprise information technology (IT) software and solutions. CA, Inc. (NASDAQ:CA) is turning out to be an attractive pick for investors–in the last year alone, it has been able to increase its dividend by 525%. For the full year of 2012, it paid dividends of $1 per share relative to the previous year of 19 cents per share. At present, the company offers a quarterly dividend of 0.25 cents per share.

How Are Dividends Safe?

CA, Inc. (NASDAQ:CA) technology has been showing solid financial performance to back its returns. Its revenue growth is stagnant. Still, the company has been able to enlarge earnings year over a year. Its solid margins led it to achieve dependable results in spite of head winds. Recently, the company announced Q1 results with $1.1 billion in revenue, a decrease of 2% over the past year quarter. Despite the headwinds to top-line growth, its solid margins led it to increase EPS by 13% to 0.51 cents/share.

Along with solid margins, CA, Inc. (NASDAQ:CA) has the potential to generate hefty cash flows. At the end of Q1, it has been able to generate cash flows from operations of $183 million, an increase of 38% over the past year. Its dividends look safe as the company anticipates increasing its operating cash flows by 4% to 6% by the end of 2012. Its payout ratio of around 50% is also manageable.

Final Notes

Cisco looks like a safe investment for dividend investors. Its solid financial position fully supports its dividends. It has low debt and potential to generate strong cash flows. I believe Cisco Systems, Inc. (NASDAQ:CSCO) is a buy for the long haul. Microsoft Corporation (NASDAQ:MSFT) has also maintained a strong financial position to back its dividends. Its free cash flows are more than enough to pay consistently increasing dividends. On the other hand, CA, Inc. (NASDAQ:CA) technology has become an attractive choice for investors after making a 525% increases in its dividend. However, I still recommend a hold rating on this company due to stagnant top line growth.

The article Three Technology Stocks for Solid Dividends originally appeared on Fool.com and is written by siraj sarwar.

siraj sarwar has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. The Motley Fool owns shares of Microsoft. siraj is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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