Top 10 Dividend Tech Stocks in 2020
Technology is taking over every industry. And now some of the best stocks you can buy are dividend tech stocks. They’ve proven themselves as consistent cash flow machines.
With so much cash piling up, the tech companies can’t reasonably reinvest it all. As a result, they pass it along as dividends to investors. For example, Microsoft has paid an annual dividend for the last 14 years. Investors can then decide what to do with it instead.
Some of the dividend tech companies below haven’t paid out for nearly as long. Although, they’re adding to their dividend history each year. And investors can buy a few of these companies to set up a steady stream of passive income…
List of Dividend Tech Stocks
- Apple (Nasdaq: AAPL)
- Microsoft (Nasdaq: MSFT)
- Intel (Nasdaq: INTC)
- IBM (NYSE: IBM)
- Cisco (Nasdaq: CSCO)
- Oracle (NYSE: ORCL)
- Broadcom (Nasdaq: AVGO)
- Texas Instruments (Nasdaq: TXN)
- Applied Materials (Nasdaq: AMAT)
- Corning (NYSE: GLW)
To build this list, I screened for larger companies with sound financials. These are important factors for dividend-paying companies. I then dived deeper into each companies’ business model and future prospects.
To get a sense of what helped them make the cut, here are a few highlights…
Top Tech Stocks Highlights
Apple’s strong ecosystem keeps its customers coming back. The company is also finding new ways to monetize its users. iPhones sales still make up the largest piece of the pie but services revenue is climbing. This segment includes App store fees, Apple Music, Apple Pay and many other services.
When determining the best dividend tech stocks, it’s also important to look at company risks. And one problem with Apple is its market share in certain areas. Many regulators are targeting big tech that have created near virtual monopolies. Although, since many of the services are free or bundled, it’s not as clear cut.
There will continue to be legal pressure on Apple, but the business will continue to grow. Investor should also see higher dividend payouts going forward.
IBM’s valuation is beaten down. It’s been a long-running turnaround but revenue growth is on the horizon. Investors can buy into “Big Blue” at much lower valuation multiples when compared to other big tech.
IBM has been transitioning from its legacy mainframe business. It’s been investing heavily into newer technologies such as blockchain, cloud services and quantum computing. That’s just to name a few and if any of these areas take off, that could generate hundreds of billions of dollars for the business down the road.
The turnaround isn’t guaranteed but that’s why IBM stock is trading on the cheap. This dividend tech stock also has a long history of paying dividends. As the share price has stalled, the dividend yield has climbed above 5%. That’s one of the highest on this list of stocks.
Cisco is riding the wave of internet expansion. The company builds and sells networking hardware, software and telecom equipment. As more devices come online, Cisco should continue to see its sales and bottom line increase.
The push for 5G is also an area of growth for Cisco. It provides an automated, cloud-to-client, software-based network for 5G. And overall, 5G is starting to becoming available in 2020 and it should be commonly available by 2022.
Another big theme for Cisco is cyber security. As more devices connect, there’s more room for cyber threats. This is a growing concern with businesses. As a result, Cisco offers a wide range of security products and software. This is another reason to be optimistic on Cisco’s future growth.
Intel continues to grow with computing demand. It’s a leading semiconductor producer with a long history of innovation. Intel powers hundreds of millions of PCs and it’s important to note that it’s losing some market share… but it’s profits in that segment continue to climb.
Intel recently announced it’s delaying its 7-nanometer chip products by about six months. And the share price dropped in response. But with continued strong cashflow, management has announced a $10 billion share buyback. If management is able to deliver on the big future growth, this is a great move for investors.
The company is transitioning to larger data-centric sales. Intel is positioning itself to lead in AI, 5G and the autonomous revolution. The company acquired a leader in vision-based self-driving car technology, Mobileye for $15.3 billion.
Final Notes on Tech Stocks with Dividends
These top tech stocks have proven track records. This has helped them pay reliable dividends. And as technology takes over more of the world, cashflow and payouts should continue to climb.
Overall, these dividend tech stocks are some of the top investing opportunities available today. And if you want to see how these investments can double or triple your portfolio, check out our free investment calculator. The dividend income can be a nice boost to your annual returns.
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