The broader equity market has had a terrible run so far this year. The major stock indexes, Dow Jones Industrial Average, Nasdaq Composite and S&P 500, have fallen 18.3%, 29.4% and 22%, respectively, year to date (YTD).
The equity market has been hammered by recession fears, inflationary pressure and soaring interest rates. The ongoing Russia-Ukraine war has further increased worries for investors about the global economic recovery.
Technology is among the most-battered sectors amid a broader market sell-off this year so far. Technology Select Sector SPDR Fund, which seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Technology Select Sector Index, has lost approximately 28% of its value YTD.
Tech companies are witnessing lower demand for their products and solutions as organizations are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues. In July 2022, Gartner lowered its forecast for worldwide IT spending growth rate to 3% from 4% mentioned earlier. The research firm’s report highlights that 2022 IT spending growth will be much slower than 2021 due to spending cutbacks across devices, software, IT services and communication services areas.
Additionally, the sector is suffering from inflationary pressure, higher wages and currency fluctuations. Supply-chain disruptions due to an acute shortage of chips and several other components are affecting the profitability of the companies in the space.
The aforementioned challenges are likely to persist in the near term, thereby negatively impacting the overall financial performances of the majority of tech stocks. We believe that investing in high-quality dividend-paying tech stocks like — Broadcom (AVGO - Free Report) , Analog Devices (ADI - Free Report) , NetApp (NTAP - Free Report) and Amdocs Limited (DOX - Free Report) — amid the ongoing macroeconomic headwinds and the highly volatile market scenario might fetch handsome returns.
A stock with a history of increasing dividends is considered healthy and offers a capital appreciation opportunity irrespective of stock market movements. Dividend growth stocks generally act as a hedge against economic uncertainty and offer downside protection with a consistent increase in payouts.
Watch These Dividend-Paying Tech Stocks
We ran the Zacks Stocks Screener to identify stocks that have a dividend yield in excess of 2% with five-year historical dividend growth of more than 0.1%. Furthermore, we have narrowed down our search by considering stocks with a Zacks Rank #3 (Hold) and a dividend payout ratio of less than 60%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s discuss the abovementioned tech stocks in detail:
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V based products.
Broadcom is benefiting from strong demand for its networking solutions, PON fiber and cable modems. The strong adoption of Broadcom’s server storage solutions by hyperscalers, an acceleration in 5G deployment, production ramp-up and an increase in radio frequency content are driving top-line growth. Additionally, the robust adoption of Wi-Fi 6 and Wi-Fi 6E for access gateways, courtesy of solid demand from homes, enterprises, telcos and other service providers, is expected to continue driving revenue growth in the broadband end market.
The stock has a dividend yield of 3.53% and a five-year historical dividend growth of 30.3%. Further, AVGO's payout ratio is 51% of earnings at present. Check Broadcom’s dividend history here.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and digital signal processing integrated circuits.
Analog Devices is riding on the strength across consumer, communications, industrial and automotive markets. Solid demand for high-performance analog as well as mixed-signal solutions is a tailwind. Strong momentum across electric vehicle space on the back of its robust Battery Management System solutions is anticipated to drive growth in the long run.
The company has a dividend yield of 2.14% and a five-year annualized dividend growth of approximately 12%. Its dividend payout ratio is 35% of earnings. Check Analog Devices’ dividend history here.
NetApp provides enterprise storage as well as data management software and hardware products and services. The Sunnyvale, CA-based company’s product line comprises two storage platforms — the FAS storage platform and the E-Series platform. The company’s all-flash storage portfolio comprises NVMe-based storage systems and new cloud-based services in order to provide hybrid storage architecture.
NetApp is benefiting from continued strength in Hybrid Cloud and Public Cloud segments and robust billings growth. The company is well positioned to gain from data-driven digital and cloud transformations. Also, it is gaining from the higher clout of FAS hybrid arrays and storage systems portfolio. The rapid adoption of Azure NetApp Files, Amazon Web Services FSx for ONTAP and Google CVS is a tailwind. Recent collaborations with Kyndryl, NVIDIA and Alluxio bode well.
NTAP has a dividend yield of 3.2% and a five-year annualized dividend growth of 21.4%. Also, the company's payout ratio is 45% of earnings at present. Check NetApp’s dividend history here.
Amdocs is one of the leading providers of customer care, billing and order management systems for communications and Internet services. The company offers amdocsONE, a line of services designed for various stages of a service provider's lifecycle. Moreover, it provides advertising and media services for media publishers, TV networks, video streaming providers, advertising agencies and service providers.
Amdocs is benefiting from its recurring revenue business model. Customer additions and solid demand for managed services are primary growth drivers. The company’s growth momentum is expected to continue due to its initiatives to aid digital, media, network and cloud transformations of its clients. The acquisition of Openet has rapidly expanded its footprint in 5G cellular networks. Its solutions have been selected by the likes of AT&T and T-Mobile to bolster their 5G footprint.
The stock has a dividend yield of 2.01% and a five-year historical dividend growth of 13.1%. Further, DOX's payout ratio is 33% of earnings at present. Check Amdocs’ dividend history here.
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The broader equity market has had a terrible run so far this year. The major stock indexes, Dow Jones Industrial Average, Nasdaq Composite and S&P 500, have fallen 18.3%, 29.4% and 22%, respectively, year to date (YTD).
The equity market has been hammered by recession fears, inflationary pressure and soaring interest rates. The ongoing Russia-Ukraine war has further increased worries for investors about the global economic recovery.
Technology is among the most-battered sectors amid a broader market sell-off this year so far. Technology Select Sector SPDR Fund, which seeks to provide investment results that, before expenses, generally correspond to the price and yield performance of the Technology Select Sector Index, has lost approximately 28% of its value YTD.
Tech companies are witnessing lower demand for their products and solutions as organizations are postponing their large IT spending plans due to a weakening global economy amid ongoing macroeconomic and geopolitical issues. In July 2022, Gartner lowered its forecast for worldwide IT spending growth rate to 3% from 4% mentioned earlier. The research firm’s report highlights that 2022 IT spending growth will be much slower than 2021 due to spending cutbacks across devices, software, IT services and communication services areas.
Additionally, the sector is suffering from inflationary pressure, higher wages and currency fluctuations. Supply-chain disruptions due to an acute shortage of chips and several other components are affecting the profitability of the companies in the space.
The aforementioned challenges are likely to persist in the near term, thereby negatively impacting the overall financial performances of the majority of tech stocks. We believe that investing in high-quality dividend-paying tech stocks like — Broadcom (AVGO - Free Report) , Analog Devices (ADI - Free Report) , NetApp (NTAP - Free Report) and Amdocs Limited (DOX - Free Report) — amid the ongoing macroeconomic headwinds and the highly volatile market scenario might fetch handsome returns.
A stock with a history of increasing dividends is considered healthy and offers a capital appreciation opportunity irrespective of stock market movements. Dividend growth stocks generally act as a hedge against economic uncertainty and offer downside protection with a consistent increase in payouts.
Watch These Dividend-Paying Tech Stocks
We ran the Zacks Stocks Screener to identify stocks that have a dividend yield in excess of 2% with five-year historical dividend growth of more than 0.1%. Furthermore, we have narrowed down our search by considering stocks with a Zacks Rank #3 (Hold) and a dividend payout ratio of less than 60%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s discuss the abovementioned tech stocks in detail:
Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS) based devices and analog III-V based products.
Broadcom is benefiting from strong demand for its networking solutions, PON fiber and cable modems. The strong adoption of Broadcom’s server storage solutions by hyperscalers, an acceleration in 5G deployment, production ramp-up and an increase in radio frequency content are driving top-line growth. Additionally, the robust adoption of Wi-Fi 6 and Wi-Fi 6E for access gateways, courtesy of solid demand from homes, enterprises, telcos and other service providers, is expected to continue driving revenue growth in the broadband end market.
The stock has a dividend yield of 3.53% and a five-year historical dividend growth of 30.3%. Further, AVGO's payout ratio is 51% of earnings at present. Check Broadcom’s dividend history here.
Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed-signal and digital signal processing integrated circuits.
Analog Devices is riding on the strength across consumer, communications, industrial and automotive markets. Solid demand for high-performance analog as well as mixed-signal solutions is a tailwind. Strong momentum across electric vehicle space on the back of its robust Battery Management System solutions is anticipated to drive growth in the long run.
The company has a dividend yield of 2.14% and a five-year annualized dividend growth of approximately 12%. Its dividend payout ratio is 35% of earnings. Check Analog Devices’ dividend history here.
NetApp provides enterprise storage as well as data management software and hardware products and services. The Sunnyvale, CA-based company’s product line comprises two storage platforms — the FAS storage platform and the E-Series platform. The company’s all-flash storage portfolio comprises NVMe-based storage systems and new cloud-based services in order to provide hybrid storage architecture.
NetApp is benefiting from continued strength in Hybrid Cloud and Public Cloud segments and robust billings growth. The company is well positioned to gain from data-driven digital and cloud transformations. Also, it is gaining from the higher clout of FAS hybrid arrays and storage systems portfolio. The rapid adoption of Azure NetApp Files, Amazon Web Services FSx for ONTAP and Google CVS is a tailwind. Recent collaborations with Kyndryl, NVIDIA and Alluxio bode well.
NTAP has a dividend yield of 3.2% and a five-year annualized dividend growth of 21.4%. Also, the company's payout ratio is 45% of earnings at present. Check NetApp’s dividend history here.
Amdocs is one of the leading providers of customer care, billing and order management systems for communications and Internet services. The company offers amdocsONE, a line of services designed for various stages of a service provider's lifecycle. Moreover, it provides advertising and media services for media publishers, TV networks, video streaming providers, advertising agencies and service providers.
Amdocs is benefiting from its recurring revenue business model. Customer additions and solid demand for managed services are primary growth drivers. The company’s growth momentum is expected to continue due to its initiatives to aid digital, media, network and cloud transformations of its clients. The acquisition of Openet has rapidly expanded its footprint in 5G cellular networks. Its solutions have been selected by the likes of AT&T and T-Mobile to bolster their 5G footprint.
The stock has a dividend yield of 2.01% and a five-year historical dividend growth of 13.1%. Further, DOX's payout ratio is 33% of earnings at present. Check Amdocs’ dividend history here.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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