Wednesday, April 27, 2016

5 Tech Stocks With A History of Growing Their Dividends

When you hear the words "tech stocks", many investors think back to the tech bubble in the late 90s. A tech company's goal back then was to plow back every penny into the business for sustained grow. The entire focus was on capital gains. During this era companies that paid dividends were looked down on as inferior.

Like our teenage years, everything was fast and furious as tech companies grew with seemingly no bounds. Eventually, however, we all mature and transition into another phase of life. The same has occurred with many of the tech companies. Consider Microsoft (MSFT) and Cisco Systems, Inc. (CSCO).

When MSFT and CSCO were formed they paid no dividend. Instead they funneled all their cash back into growing the business. As they matured and growth slowed, each began to pay a very nominal dividend. Today, these companies and industries are mature and their rising yields reflect it, with MSFT paying 2.7% and CSCO paying 3.8%.

This week week, I screened my Dividend Growth Stocks database for select Technology companies with a yield at or above 2.5% and that have increased their dividends for at least 10 consecutive years. The results are presented below:

Texas Instruments Inc. (TXN) is one of the world's largest manufacturers of semiconductors, this company also produces scientific calculator products and DLP products for TVs and video projectors. The company has paid a cash dividend to shareholders every year since 1962 and has increased its dividend payments for 13 consecutive years. Yield: 2.6%

Linear Technology Corporation (LLTC) manufactures high-performance linear integrated circuits. The company has paid a cash dividend to shareholders every year since 1992 and has increased its dividend payments for 23 consecutive years. Yield: 2.8%

Microsoft (MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite. The company has paid a cash dividend to shareholders every year since 2003 and has increased its dividend payments for 14 consecutive years. Yield: 2.8%

Maxim Integrated Products, Inc. (MXIM) designs, develops and manufactures linear and mixed-signal integrated circuits used mainly in signal processing applications. The company has paid a cash dividend to shareholders every year since 2002 and has increased its dividend payments for 17 consecutive years. Yield: 3.2%

IBM's (IBM) global offerings include information technology services, software, computer hardware equipment, fundamental research, and related financing. The company has paid a cash dividend to shareholders every year since 1916 and has increased its dividend payments for 20 consecutive years. Yield: 3.5%

As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However some of the others may be worth additional due diligence.

My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 250+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.

Full Disclosure: Long MSFT in my Dividend Growth Portfolio and long IBM in my High Dividend Growth Portfolio. See a list of all my Dividend Growth Portfolio holdings here.

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Tags: TXN, LLTC, MSFT, MXIM, IBM,

1 comment:

  1. It's nice to see the MSFT has come down a little in price but I wish I had jumped on them when they were down in the $30's! I knew Windows 10 was going to work wonders for them - especially with how bad Win8 was!

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