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When thinking of dividends, typical sectors that come to the minds of many include utilities, finance, or consumer staples.
However, it could surprise some that several technology companies also reward their investors handsomely.
Technology stocks are generally not targeted by income-focused investors, as it’s common for these companies to utilize cash to fuel growth.
Still, several large-cap tech stocks – Oracle (ORCL - Free Report) , International Business Machines (IBM - Free Report) , and Broadcom (AVGO - Free Report) – have no issue paying their investors.
And they’ve grown their payouts quite significantly over the last five years.
Below is a chart illustrating the performance of all three stocks over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
For those seeking tech exposure paired with dividends, let’s take a closer look at each one.
Broadcom
Broadcom is a premier designer, developer, and global supplier of a broad range of semiconductor devices focusing on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V-based products.
It’s nearly impossible to ignore the company’s dividend metrics; AVGO’s annual dividend currently yields a rock-solid 3.2%, nearly triple that of its Zacks Computer and Technology sector.
And the company has been committed to increasingly rewarding its shareholders, growing its payout by more than 20% over the last five years.
Image Source: Zacks Investment Research
Broadcom has a stellar earnings track record, exceeding earnings and revenue expectations in 11 consecutive quarters. Just in its latest release, AVGO penciled in a nearly 2% EPS surprise and reported revenue marginally above estimates.
Image Source: Zacks Investment Research
Oracle
Oracle is one of the largest enterprise-grade database, middleware, and application software providers, offering cloud solutions and services that can be used to build and manage various cloud deployment models.
The company’s annual dividend currently yields 1.5%, nicely above its Zacks sector average. Impressively, Oracle carries a solid 14% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
International Business Machines
International Business Machines has gradually evolved as a provider of cloud and data platforms, with its Red Hat acquisition strengthening its position in the hybrid cloud market. The company sports a Zacks Rank #2 (Buy).
IBM’s dividend metrics could be the most impressive of all; IBM’s annual dividend yield sits at 4.6%, nowhere near its Zacks sector average.
Image Source: Zacks Investment Research
In addition, the company’s valuation multiples aren’t stretched, further bolstered by its Style Score of “B” for Value. IBM shares currently trade at a 14.9X forward earnings multiple, above the five-year median but below the Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Investors love dividends, as they give a nice cushion, provide a reliable income stream, and offer more than one way to profit from an investment.
Still, when thinking of dividend-paying stocks, the technology sector certainly isn’t an area that receives attention.
However, all three stocks above – Oracle (ORCL - Free Report) , International Business Machines (IBM - Free Report) , and Broadcom (AVGO - Free Report) – are exceptions, rewarding their shareholders handsomely.
For those seeking income paired with tech exposure, all three deserve consideration.
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3 Tech Stocks Paying Solid Dividends
When thinking of dividends, typical sectors that come to the minds of many include utilities, finance, or consumer staples.
However, it could surprise some that several technology companies also reward their investors handsomely.
Technology stocks are generally not targeted by income-focused investors, as it’s common for these companies to utilize cash to fuel growth.
Still, several large-cap tech stocks – Oracle (ORCL - Free Report) , International Business Machines (IBM - Free Report) , and Broadcom (AVGO - Free Report) – have no issue paying their investors.
And they’ve grown their payouts quite significantly over the last five years.
Below is a chart illustrating the performance of all three stocks over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
For those seeking tech exposure paired with dividends, let’s take a closer look at each one.
Broadcom
Broadcom is a premier designer, developer, and global supplier of a broad range of semiconductor devices focusing on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V-based products.
It’s nearly impossible to ignore the company’s dividend metrics; AVGO’s annual dividend currently yields a rock-solid 3.2%, nearly triple that of its Zacks Computer and Technology sector.
And the company has been committed to increasingly rewarding its shareholders, growing its payout by more than 20% over the last five years.
Image Source: Zacks Investment Research
Broadcom has a stellar earnings track record, exceeding earnings and revenue expectations in 11 consecutive quarters. Just in its latest release, AVGO penciled in a nearly 2% EPS surprise and reported revenue marginally above estimates.
Image Source: Zacks Investment Research
Oracle
Oracle is one of the largest enterprise-grade database, middleware, and application software providers, offering cloud solutions and services that can be used to build and manage various cloud deployment models.
The company’s annual dividend currently yields 1.5%, nicely above its Zacks sector average. Impressively, Oracle carries a solid 14% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
International Business Machines
International Business Machines has gradually evolved as a provider of cloud and data platforms, with its Red Hat acquisition strengthening its position in the hybrid cloud market. The company sports a Zacks Rank #2 (Buy).
IBM’s dividend metrics could be the most impressive of all; IBM’s annual dividend yield sits at 4.6%, nowhere near its Zacks sector average.
Image Source: Zacks Investment Research
In addition, the company’s valuation multiples aren’t stretched, further bolstered by its Style Score of “B” for Value. IBM shares currently trade at a 14.9X forward earnings multiple, above the five-year median but below the Zacks sector average.
Image Source: Zacks Investment Research
Bottom Line
Investors love dividends, as they give a nice cushion, provide a reliable income stream, and offer more than one way to profit from an investment.
Still, when thinking of dividend-paying stocks, the technology sector certainly isn’t an area that receives attention.
However, all three stocks above – Oracle (ORCL - Free Report) , International Business Machines (IBM - Free Report) , and Broadcom (AVGO - Free Report) – are exceptions, rewarding their shareholders handsomely.
For those seeking income paired with tech exposure, all three deserve consideration.