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Three Tech Stocks Offering Dividends Worth Considering in July

Investors demonstrating patience can potentially derive consistent earnings from these equities.

Three Tech Companies Providing Dividends Worth Considering in July
Three Tech Companies Providing Dividends Worth Considering in July

Three Tech Stocks Offering Dividends Worth Considering in July

Investing in dividend stocks can significantly contribute to your total returns, even if the stock's price isn't skyrocketing. Dividends are a reward for your patience, sourced from a company's earnings, acting as a potential compensation for the lack of price growth.

Many tech giants, especially younger ones, often invest their profits back into the business rather than offering dividends. However, several tech stocks offer a compelling blend of growth and dividends. Here are three examples:

1. Taiwan Semiconductor Manufacturing (TSM)

Taiwan Semiconductor Manufacturing (TSMC) is a trailblazer in chipmaking, manufacturing customized microchips for major tech players like Apple, Amazon, and Alphabet. Its competitive edge and focus on third-party chips have driven a substantial revenue and profit growth. Although its Q1 FY revenue fell 4.8% year-over-year (YoY), it's a massive leap since five years ago.

TSMC's revenue growth is further emphasized by its improving profitability, demonstrating operational efficiency. The semiconductor market's increasing demand, due to digital transformations and technologies like AI, should gain momentum with more industries embracing digitalization.

TSMC's current quarterly dividend stands at $0.49 per share, resulting in a dividend yield of around 1.8%. Although not particularly impressive, it outperforms the S&P 500's average dividend yield, offering a more tangible return for investors.

2. AT&T (T)

AT&T's controversial foray into the media and entertainment sector may have been unsuccessful, but its core telecom business is thriving. After spinning off WarnerMedia, the telecom giant can now focus on its strengths. Its dividend yield currently hovers around 7%, making it one of the S&P 500's most lucrative dividend stocks.

Although AT&T carries a substantial $123 billion in long-term debt, its strong free cash flow and interest rate environment allow it to manage its liabilities effectively and maintain its dividend payments.

AT&T's steady customer growth and its indispensable role in today's world make it an attractive investment. Its dividend yield offers investors a safety net, providing a cushion against market volatility.

3. IBM (IBM)

As a 110-year-old tech giant, IBM has built a reputation for both longevity and dividend payouts. While it may not be the most flashy growth stock, its AI-focused push and commitment to corporate efficiency have solidified its place within corporations seeking to streamline their operations.

IBM's AI initiatives and recent acquisitions have boosted its overall capabilities, equipping it to better cater to clients facing increasing productivity demands. Nevertheless, IBM is undergoing ongoing transformation and market uncertainties, but its steady dividend yield remains compelling.

IBM's 28-year streak of increasing dividends and its healthy free cash flow provide additional reasons for investors to be optimistic about its stability and growth prospects. A 5% dividend yield could serve as a supplemental benefit, irrespective of AI's role in its future.

Enrichment Data:

Three additional tech stocks with strong growth and dividends are ASML, Cisco Systems, and IBM. ASML offers a dividend yield of 4.79%, while Cisco Systems delivers a 2.70% yield. IBM's dividend yield is 2.99%. These stocks present compelling opportunities for investors seeking both capital appreciation and a steady income stream.

Investing in tech stocks like TSMC, AT&T, and IBM can provide a blend of growth and dividends, offering a potential source of income for investors. TSM's current quarterly dividend yield of 1.8% outperforms the S&P 500's average dividend yield, providing a more tangible return for investors.

Besides TSM, tech giants ASML and Cisco Systems also offer dividend yields of 4.79% and 2.70% respectively, making them attractive options for investors seeking both capital appreciation and a steady income stream.

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