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3 Dividend-Paying, Blue-Chip Tech Stocks to Buy on Earnings Growth
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Technology stocks, including FAANG giants Netflix (NFLX - Free Report) and Facebook , have helped spark the S&P 500’s strong start to 2019, up roughly 16%. Still, no matter how long the current rally lasts, it is often a prudent investment strategy to search for stocks that provide income and look poised to see their earnings grow.
With that said, we also want to give investors exposure to the tech industry. Therefore, we have highlighted three blue-chip tech stocks that present solid dividend yields and are projected to see their bottom-lines climb.
Previously-underperforming Oracle stock has outpaced the broader Computer Software-Services Market industry over the last 12 months, up 20% against the industry’s 8% average climb. ORCL’s recent strength has helped it rest right near its new all-time highs. Plus, the firm is coming off a better-than-expected Q3 fiscal 2019 that saw its adjusted earnings pop 8%, while revenue climbed 3% on a constant currency basis—down 1% in USD. The historic tech giant has tried to expand its cloud business to better compete with industry leaders such as Amazon (AMZN - Free Report) and improve its revenue. Oracle’s cloud services and license support unit accounts for roughly 70% of quarterly revenue these days.
Despite some of its top-line struggles, our Zacks Consensus Estimates project strong bottom-line growth. The company’s adjusted current-quarter earnings are projected to pop over 8% to reach $1.07 per share. Meanwhile, the firm’s fiscal 2019 EPS figure is expected to jump 10.3%. Better yet, ORCL’s full-year 2020 earnings are projected to come in 10% higher than our 2019 estimate. On top of that, Oracle has earned a ton of positive earnings estimate revision activity recently and its 2019 estimates have trended upward, along with its stock price. ORCL is also a dividend payer with a 1.76% yield at the moment that is trading well below its industry’s average forward P/E of 27X at 16.3X forward 12-month Zacks Consensus EPS estimates—which falls nearly in line with ORCL’s five-year median.
Cisco is set to release its third-quarter fiscal 2019 financial results on May 15. When it does, our Zacks Consensus Estimate calls for the historic networking power’s adjusted earnings to surge 16.7% to reach $0.77 per share on 3.5% revenue expansion. Meanwhile, the firm’s full-year earnings are projected to jump nearly 18%, with revenues expected to pop 4.75%. Peeking further ahead, Cisco’s fiscal 2020 EPS figure is projected to jump 10.5% above our fiscal 2019 estimate to touch $3.38 per share on 3.4% revenue growth.
Along with its strong earnings outlook and projected top-line expansions, investors should note that Cisco has expanded its IoT business in recent years in order to better compete in today’s tech environment. These moves have helped CSCO stock soar nearly 140% over the last five years to top Google (GOOGL - Free Report) and nearly match Apple’s (AAPL - Free Report) climb. Shares of Cisco have also surged 26% in 2019 and sit not too far off their 52-week highs at the moment. The company is currently a Zacks Rank #2 (Buy) that rocks a “B” grade for Value and an “A” for Momentum in our Style Scores system, with a 2.55% dividend yield. Plus, the company’s quarterly payout marked a 6% increase from last year and a 20% improvement on a two-year stack.
Microsoft topped both earnings and revenue estimates on April 24. Much of the focus once again fell on its Intelligent Cloud business, which saw its revenue jump 22%. More specifically, Microsoft’s key Azure division sales skyrocketed 73%. Furthermore, MSFT’s Office-heavy Productivity and Business Processes segment jumped 14%, while More Personal Computing grew 8%. Microsoft’s expansion into new growth areas and the continued strength of its core businesses looks poised to help MSFT post 13% revenue growth in fiscal 2019. On top of that, our Zacks Consensus Estimate calls for the company’s fiscal 2020 revenues to jump 10.7% above our current-year estimate to reach $138.16 billion.
At the bottom end of the income statement, MSFT’s full-year earnings are projected to surge 18%, with 2020’s EPS figure expected to jump 11.4% higher than our 2019 estimate. Microsoft has also seen a ton of positive longer-term earnings estimate revision activity since it posted its Q3 2019 results, which helps it earn a Zack Rank #2 (Buy) and an “A” grade for Momentum. Moreover, MSFT is a dividend payer that has paid out a $0.46 per share quarterly dividend throughout its fiscal 2019, up 9.5% from the prior year’s quarterly payout. Meanwhile, the company’s dividend yield rests at 1.46%, with Microsoft shares up 26% in 2019 and 87% over the last two years.
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This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
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3 Dividend-Paying, Blue-Chip Tech Stocks to Buy on Earnings Growth
Technology stocks, including FAANG giants Netflix (NFLX - Free Report) and Facebook , have helped spark the S&P 500’s strong start to 2019, up roughly 16%. Still, no matter how long the current rally lasts, it is often a prudent investment strategy to search for stocks that provide income and look poised to see their earnings grow.
With that said, we also want to give investors exposure to the tech industry. Therefore, we have highlighted three blue-chip tech stocks that present solid dividend yields and are projected to see their bottom-lines climb.
1. Oracle (ORCL - Free Report)
Previously-underperforming Oracle stock has outpaced the broader Computer Software-Services Market industry over the last 12 months, up 20% against the industry’s 8% average climb. ORCL’s recent strength has helped it rest right near its new all-time highs. Plus, the firm is coming off a better-than-expected Q3 fiscal 2019 that saw its adjusted earnings pop 8%, while revenue climbed 3% on a constant currency basis—down 1% in USD. The historic tech giant has tried to expand its cloud business to better compete with industry leaders such as Amazon (AMZN - Free Report) and improve its revenue. Oracle’s cloud services and license support unit accounts for roughly 70% of quarterly revenue these days.
Despite some of its top-line struggles, our Zacks Consensus Estimates project strong bottom-line growth. The company’s adjusted current-quarter earnings are projected to pop over 8% to reach $1.07 per share. Meanwhile, the firm’s fiscal 2019 EPS figure is expected to jump 10.3%. Better yet, ORCL’s full-year 2020 earnings are projected to come in 10% higher than our 2019 estimate. On top of that, Oracle has earned a ton of positive earnings estimate revision activity recently and its 2019 estimates have trended upward, along with its stock price. ORCL is also a dividend payer with a 1.76% yield at the moment that is trading well below its industry’s average forward P/E of 27X at 16.3X forward 12-month Zacks Consensus EPS estimates—which falls nearly in line with ORCL’s five-year median.
2. Cisco Systems, Inc. (CSCO - Free Report) )
Cisco is set to release its third-quarter fiscal 2019 financial results on May 15. When it does, our Zacks Consensus Estimate calls for the historic networking power’s adjusted earnings to surge 16.7% to reach $0.77 per share on 3.5% revenue expansion. Meanwhile, the firm’s full-year earnings are projected to jump nearly 18%, with revenues expected to pop 4.75%. Peeking further ahead, Cisco’s fiscal 2020 EPS figure is projected to jump 10.5% above our fiscal 2019 estimate to touch $3.38 per share on 3.4% revenue growth.
Along with its strong earnings outlook and projected top-line expansions, investors should note that Cisco has expanded its IoT business in recent years in order to better compete in today’s tech environment. These moves have helped CSCO stock soar nearly 140% over the last five years to top Google (GOOGL - Free Report) and nearly match Apple’s (AAPL - Free Report) climb. Shares of Cisco have also surged 26% in 2019 and sit not too far off their 52-week highs at the moment. The company is currently a Zacks Rank #2 (Buy) that rocks a “B” grade for Value and an “A” for Momentum in our Style Scores system, with a 2.55% dividend yield. Plus, the company’s quarterly payout marked a 6% increase from last year and a 20% improvement on a two-year stack.
3. Microsoft (MSFT - Free Report)
Microsoft topped both earnings and revenue estimates on April 24. Much of the focus once again fell on its Intelligent Cloud business, which saw its revenue jump 22%. More specifically, Microsoft’s key Azure division sales skyrocketed 73%. Furthermore, MSFT’s Office-heavy Productivity and Business Processes segment jumped 14%, while More Personal Computing grew 8%. Microsoft’s expansion into new growth areas and the continued strength of its core businesses looks poised to help MSFT post 13% revenue growth in fiscal 2019. On top of that, our Zacks Consensus Estimate calls for the company’s fiscal 2020 revenues to jump 10.7% above our current-year estimate to reach $138.16 billion.
At the bottom end of the income statement, MSFT’s full-year earnings are projected to surge 18%, with 2020’s EPS figure expected to jump 11.4% higher than our 2019 estimate. Microsoft has also seen a ton of positive longer-term earnings estimate revision activity since it posted its Q3 2019 results, which helps it earn a Zack Rank #2 (Buy) and an “A” grade for Momentum. Moreover, MSFT is a dividend payer that has paid out a $0.46 per share quarterly dividend throughout its fiscal 2019, up 9.5% from the prior year’s quarterly payout. Meanwhile, the company’s dividend yield rests at 1.46%, with Microsoft shares up 26% in 2019 and 87% over the last two years.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>