Microsoft Dividend Profile
Microsoft Corporation (NASDAQ:MSFT) is a technology company. It is engaged in manufacturing, developing, licensing and supporting a variety of software products and services. Microsoft Corporation (NASDAQ:MSFT) is one of the best dividend stocks in the technology sector, and is famous for paying consistently increasing dividends. In the past five years, Microsoft Corporation (NASDAQ:MSFT) has been able to increase its dividend by 109%. At present, the company offers a quarterly dividend of 0.23 cent per share, yielding 2.69%.
How Are Dividends Safe?
Its diverse revenue base continues to generate solid financial results. The company is consistently investing in growth opportunities to boost investors’ returns. Recently, the company announced Q3 results with $20.49 billion in revenue, an increase of $3 billion over the past year quarter. Its bold bet on cloud services is turning out to be a profitable and new growth opportunity for the company. Its bet on Windows devices, including Office 365, Windows Azure, Skype, and Xbox LIVE, position it well for the long-term growth.
Along with top line growth, the company has the potential to generate consistently increasing cash flows. At the end of 2012, its operating cash flows increased by $5 billion over the past year. Its free cash flows adequately cover dividends. At the end of 2012, its free cash flows stood at $29 million, while dividend payments accounted for only $6.3 billion. Its payout ratio based on dividends stands at 38%, providing a lot of room to increase its dividends.
Cisco Dividend Profile
Cisco Systems, Inc. (NASDAQ:CSCO) designs and manufactures communications and information technology-related products. Over the past two years, Cisco Systems, Inc. (NASDAQ:CSCO) has become an attractive choice for investors. In the last year alone, it has been able to enlarge its dividends by 112%. It has stretched its dividend from 0.08 cents to 0.17 cents in the last year alone. At present, the company offers a quarterly dividend of 0.17 cents/share.
How Are Dividends Safe?
Cisco Systems, Inc. (NASDAQ:CSCO) has been showing solid top line growth given the improving economic environment, and has been able to post record sales over nine consecutive quarters. Recently, it announced third quarter results with record sales of 12.2 billion. In the past three years, it has stretched its revenue by 8.4%. Along with solid revenue growth, it has an ability to turn sales into massive profits. At the end of Q3, it has generated EPS of 51 cents, beating consensus estimates by 2%.
Combined with an incredible top line, Cisco Systems, Inc. (NASDAQ:CSCO) has the potential to generate strong cash flows. At the end of the latest quarter, its operating cash flow stands at $8.9 billion, representing an increase by a massive $3.1 billion. Its free cash flows are also very strong at present with $8.6 billion, dividend payments only accounting for $2.3 billion. Cisco Systems, Inc. (NASDAQ:CSCO)’s financial health is also in an ideal situation to support dividends. It has an extremely low debt to equity ratio and high current and quick ratios.
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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