Tags: technology stocks for growth and dividends | Cisco | Intel | Texas Instruments

Bob Ciura: 3 Top Tech Stocks for Growth & Dividends


Bob Ciura By Tuesday, 28 December 2021 02:35 PM EST Current | Bio | Archive

Tech stocks have not usually been associated with dividends. Instead, the technology sector is more closely linked to growth investing. And while the tech sector will always be home to many popular growth stocks, there are also tech stocks that pay dividends well above the market average.

With the average S&P 500 stock yielding 1.3% right now, investors can find tech stocks with yields of 2% or more. This article will discuss 3 tech stocks that combine growth and dividends.

Tech Dividend Stock: Intel Corporation (INTC)

Intel is the largest manufacturer of microprocessors for personal computers, shipping about 85% of the world’s microprocessors. Intel also manufactures products like servers and storage devices that are used in cloud computing. The company generates about $73 billion in annual sales.

In the 2021 third quarter, Intel grew revenue by 3.6%, while adjusted earnings-per-share increased 54% year-over-year. PC-Centric business revenue fell 2% due to component shortages. PC volumes fell 6% year-over-year, but average selling prices for notebooks improved 10% and desktop was higher by 4%.

Meanwhile, Intel’s growth from Data Centers was more impressive at 10% as unit volumes increased 8%. The company’s primary growth segment, the Internet of Things Group, grew revenue by 54% to an all-time record of $1.04 billion. Mobileye improved 39% to a third quarter record of $326 million due to higher global vehicle production.

For 2021, the company expects to generate adjusted earnings-per-share of $5.28. Intel generates strong profits and cash flow, which fuel the company’s shareholder returns. Intel stock has an attractive dividend yield of 2.7%.

Tech Dividend Stock: Cisco Systems (CSCO)

Cisco is the global leader in high performance computer networking systems. The company’s routers and switches allow networks around the world to connect to each other through the internet. Cisco also offers data center, cloud, and security products. The company generates about $53 billion in annual revenues.

Cisco has generated steady growth over the course of 2021. In the most recent quarter, Cisco grew revenue by 8.1% to $12.9 billion. Adjusted net income of $3.5 billion, or $0.82 per share, up 8% year-over-year.

The company saw broad-based growth across its business segments. For example, Secure Agile Networks, formerly known as Infrastructure, grew 10%. Meanwhile, End-to-End Security, formerly known as Security, grew revenue by 4%. Internet for the Future grew revenue by 46% and Optimized Application Experiences was up 18%.

Cisco is a shareholder-friendly company that returns lots of cash to investors. Cisco repurchased 5 million shares at an average price of $56.49 during the quarter. Cisco has $7.7 billion, or ~3% of its current market cap, remaining on its share repurchase authorization. The company also distributed $1.6 billion of dividends during the quarter.

For the full fiscal year, Cisco guides for 5%-7% revenue growth, while adjusted EPS growth is expected at 6% at the midpoint of guidance. This should easily allow for continued dividend increases and share buybacks. Cisco stock yields 2.5%.

Tech Dividend Stock: Texas Instruments (TXN)

Texas Instruments is a semiconductor company that operates two business units: Analog and Embedded Processing. Its products include semiconductors that measure sound, temperature and other physical data and convert them to digital signals. It also makes semiconductors that are designed to handle specific tasks and applications.

The company has generated impressive growth in 2021. In the most recent quarter Texas Instruments generated revenues of $4.6 billion, up 22% year over year. Analog and Embedded Processing segment revenue increased 24% and 13%, respectively. Gross profit margin expanded to nearly 68%. The company’s consistently high profitability gave it the ability to return lots of cash to shareholders.

Texas Instruments is one of the most shareholder-friendly companies in the tech sector, when it comes to cash returns. Consider that from 2004-2020, Texas Instruments grew its dividend at an average rate of 26% per year, while the company reduced its share count by 46% in the same period.

These cash returns were made possible by the company’s dominance of its selected markets. Free cash flow rose by 12% annually from 2004 through 2020, which explains the company’s impressive cash returns. Texas Instruments has increased its dividend for 18 consecutive years. Shares currently yield 2.4%.
Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.

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Tech stocks have not usually been associated with dividends. Instead, the technology sector is more closely linked to growth investing.
technology stocks for growth and dividends, Cisco, Intel, Texas Instruments
Tuesday, 28 December 2021 02:35 PM
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