Tags: Technology | companies | dividends | new

The Next New Thing for Tech Companies: Dividends

By    |   Monday, 02 July 2012 07:19 AM

For years technology companies were content to simply give their investors strong growth, but now they are increasingly providing dividends too.

“Dividends became a badge of dishonor in the ‘90s, a stigma that endured into the new century,” Kevin Kelleher writes in Fortune. “[That’s] why it's ironic that, in 2012, the dividend has been making something of a comeback in the tech sector.”

Even Apple, whose share price has rocketed 44 percent higher so far this year, announced in March that it would pay out dividends for the first time since 1995.

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And earlier in June, Dell, whose stock has dropped 14 percent so far this year, decided to offer a dividend for the first time in its history.

Other tech stalwarts that issue dividends include IBM, Cisco, Microsoft, and Intel. Dividends per share among tech companies rose 24 percent last year.

And eight of the 31 companies in the Standard & Poor’s 500 that started paying dividends in 2010 and 2011 were in the tech sector, according to Factset.

Many analysts expect more dividend increases for tech companies. Moody's analyst Richard Lane forecasts a 14 percent gain for 2012.

Some of the more established tech names providing dividends, such as Microsoft and Intel, have seen little appreciation in their share price over most of the last decade.

So you can view the stocks almost as bond-equivalents, offering attractive yields without great risk of principal loss.

Editor's Note: This Wasn’t an Accident — Experts Testify on Financial Meltdown

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Monday, 02 July 2012 07:19 AM
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