Technology, with its rousing momentum, has beckoned to investors, offering substantial gains and lifting spirits over the past year. The Zacks Computer and Technology sector alone has surged nearly 48% during this time, a marked contrast to the S&P 500’s notable 25% gain.
Investors have a soft spot for dividends, serving as a cushion against market downturns and delivering a steady stream of passive income. For those seeking a blend of technology and dividends, three stocks – Dell Technologies (DELL), Qualcomm (QCOM), and IBM (IBM) – fit the bill.
Exploring the Selections
Notably, all three stocks carry a favorable Zacks Rank, signifying optimism among analysts. Each of these companies also rewards its shareholders with quarterly payouts.
Dell Technologies
Presently holding a Zacks Rank #2 (Buy), Dell Technologies specializes in providing information technology solutions. It offers shareholders an annual yield of 1.7%, paired with a sustainable payout ratio standing at 26% of its earnings.
The outlook for the current fiscal year looks promising, with a $6.66 Zacks Consensus EPS estimate, marking an 8% increase over the last year. Dell’s share performance has been energized by consecutive quarters of better-than-expected results, surpassing the Zacks Consensus EPS estimate by an impressive average of 36% over the last four releases.
However, it’s important to bear in mind that the company’s growth is expected to decelerate in its current fiscal year, with consensus expectations indicating a 12% decline in earnings on 13% lower sales.
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Qualcomm
Another Zacks Rank #2 (Buy) company, Qualcomm designs, manufactures, and markets digital wireless telecommunication products and services based on Code Division Multiple Access (CDMA) technology. Earnings expectations for Qualcomm have seen a hike across the board.
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Qualcomm’s shares yield 2.1% annually, and the company is dedicated to increasingly rewarding shareholders, evident in its 6.3% five-year annualized dividend growth rate.
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The latest quarterly results posted by the company surpassed expectations, with a 15% beat relative to the Zacks Consensus EPS estimate and sales 4.5% ahead of the consensus. Furthermore, the company outperformed its prior guidance, and also returned $1.7 billion to shareholders through buybacks and dividend payouts.
IBM
IBM, sporting a Zacks Rank #2 (Buy), operates as an information technology (IT) firm. Analysts have raised their earnings expectations across the board in recent months. Shares presently boast an annual yield of 3.6%, dwarfing the Zacks Computer and Technology sector average of 0.6%.
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IBM’s most recent quarterly results exceeded expectations, with software sales climbing 8% year-over-year, driven by increased customer adoption of its Watson AI and data platform. Additionally, its cash-generating abilities received a notable boost, with operating cash flow reaching $3.1 billion, significantly surpassing the $1.9 billion mark from the year-ago period.
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In Conclusion
Investing in dividend-paying stocks doesn’t have to be lackluster, as the technology sector offers many dynamic companies that bring value to shareholders through regular payouts. For those interested in combining exposure to the sector with quarterly dividends, Dell Technologies (DELL), Qualcomm (QCOM), and IBM (IBM) tick all the right boxes. Not to forget, all three currently hold a favorable Zacks Rank, speaking volumes about the positive outlook among analysts.
