Tech stocks are likely to remain some of the most desirable on the market for years to come. But investors who want to be a part of the technology industry don’t just have to search for high-flying growth stocks. Instead, tech-minded investors can take a page out of the income investing book and focus on companies with solid dividends.
Finding a strong dividend-yielding tech stock might seem difficult, but investors should not feel too intimidated. For example, Apple AAPL and some of the other biggest names in tech, pay dividends. And dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, which is a great one-stop screening tool for investors of all kinds.
By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and you will find some of the best tech stocks for dividend investors to target.
With all that said, check out these three dividend-paying tech stocks to buy right now:
1. CDW Corporation CDW
CDW is a multi-brand technology solutions powerhouse that works with enterprise-level firms, governments, and more across the U.S., Canada, and the UK. The Lincolnshire, Illinois-based company’s portfolio is made up of over 1,000 brands and 100,000 products that range from security offerings to cloud computing solutions. CDW is coming off a better-than-projected first quarter of 2019 and has seen its stock price soar 37% in 2019. Shares of CDW opened at $106.48 on Thursday, not too far off their 52-week high.
Along with its strong first quarter and impressive price movement, CDW declared a new quarterly cash dividend of $0.295 per common share, which marked a 40% increase over last year’s dividend. The tech firm currently pays a $1.18 annualized dividend, with a 1.12% yield. Looking ahead, our current Zacks Consensus Estimates call for the company’s adjusted fiscal 2019 earnings to climb 11.6% on 7.3% revenue growth. Meanwhile, the firm’s price/sales ratio of 0.92 marks an impressive discount compared to its industry’s 2.15 average. And CDW has seen its earnings estimate revision activity trend completely upward recently for fiscal 2019 and 2020, which helps CDW earn a Zacks Rank #2 (Buy). The firm also sports an “A” grade for Momentum and “Bs” for both Value and Growth.
2. Applied Materials, Inc. AMAT
Chip stocks got a boost earlier this week on optimism regarding a possible resolution to the ongoing U.S.-China trade war. This helped lift shares of Applied Materials, which are now up roughly 31% in 2019. Despite the climb, AMAT stock still rests 14% below its 52-week high at $43.44 per share through late morning trading Thursday. Like many other chip firms, Applied Materials’ 2019 earnings and revenue are projected to fall, thanks to a multitude of factors within the historically cyclical semiconductor industry
Despite the current downturn, the semiconductor equipment maker’s long-term outlook is more positive. The firm’s 2020 revenues are projected to jump 8.5% above our current-year estimate to help lift earnings 18.3% higher than 2019’s estimate. Meanwhile, AMAT’s board recently approved a 5% increase to its quarterly cash dividend from $0.20 to $0.21 per share to help lift its yield to 1.98%. On top of that, Applied Materials’ P/E of 14.29 matches its industry’s average and its price/sales ratio of 2.52 represents a discount against its industry’s 3.07. AMAT is Zacks Rank #2 (Buy) right now, based, in large part, on its positive longer-term earnings estimate revision activity.
3. Microsoft MSFT
Microsoft stock counties to hit new all-time highs, which it did once again Thursday. Shares of MSFT are now up 37% in 2019 and touched $137.66 in morning trading. The tech titan is currently the world’s most valuable public firm, with a market cap just over $1 trillion. Microsoft’s legacy Windows and Office businesses have evolved and continue to drive growth. In recent years, however, MSFT’s cloud computing unit has grabbed Wall Street’s attention as the firm’s division, highlighted by Azure, has turned Microsoft into the second largest cloud player behind only Amazon AMZN.
In recent weeks, Microsoft has detailed some of its plans to enter the nascent cloud gaming market in an effort to expand its video game strength for the next era, as Google GOOGL aims to break in this fall. This includes a partnership with gaming rival Sony SNE. MSFT’s current full-year earnings are projected to climb 18% on the back of 13.1% revenue growth. Microsoft has paid out a $0.46 per share quarterly dividend throughout fiscal 2019, for an annualized payout of $1.84 a share. Microsoft’s current dividend represented a 9.5% jump from the prior year’s quarterly payout, while its yield sits at 1.36%. MSFT is a Zacks Rank #2 (Buy) that also rocks a “B” grade for Growth and an “A” for Momentum.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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