The global financial market has hit a rough patch, thanks to the escalating market volatility due to the US-China trade tension, waning economy and geopolitical turmoil. Moreover, the recent attack on Saudi oil plants induced a spike in oil prices, which if persisted, will be detrimental to global economy.
Investors are now looking for relatively safe havens to invest in. Stocks with high dividend yield are promising investment bets as these companies offer good payoff options. Acting as a hedge against economic or political instability as well as stock market volatility, these stocks become more attractive, as investment risks escalate.
Moreover, the stability that the large-cap stocks (market capitalization of more than $10 billion) provide compared to small and mid-cap counterparts makes those a solid investment pick.
Notably, as large cap stocks offer high degree of maturity, the same lack in rapid growth with respect to share price movement. Therefore, in order to compensate shareholders, the companies distribute a portion of their profits as dividends while retaining the rest to reinvest in the business.
Dividend investing thus provides a significant source of income for investors, allowing them to capture some of the returns of their investment on a regular basis.
Technology Stocks Offer Solid Returns
Technology has been one of the most bankable sectors for investors, given the new opportunities of growth it presents. Rapid proliferation of AI, cloud computing, IoT, cyber security, online streaming, autonomous vehicles and wearables continue to drive the technology industry.
However, when investors look for dividend stocks, they tend to overlook the technology sector as most technology firms plow back their earnings into their businesses in order to fuel growth.
Nonetheless, surging revenues and improving margins have helped the large cap tech companies to generate solid cash flows. As a result, many tech firms have started paying out hefty dividends to shareholders and are growing the dividend rate as well.
Here we pick five technology stocks that reward investors with steady dividends.
With the help of the Zacks Stock Screener, we selected five large-cap tech companies with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offering dividend yield (ratio of a company's dividend paid out to shareholders relative to its share price) higher than the industry those belong to. You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows price performance of the five best bets so far this year.
Western Digital Corporation WDC is one of the largest hard disk drive (HDD) producers in the United States. This Zacks #1 Ranked stock has a dividend yield of 3.18% compared to its industry’s 3.05%. Moreover, its five-year historical dividend yield is 2.98% and it has a market cap of $19.12 billion.
Shares of the company have soared 70.3% year to date.
KLA Corporation KLAC manufactures process control and yield management solutions for the semiconductor and related nanoelectronics industries worldwide. The stock with a Zacks Rank #2 stock has a dividend yield of 1.98%, higher than the industry’s 1.63%. Moreover, its five-year historical dividend yield is 2.79% and it has a market cap of $23.9 billion.
Shares of the company have surged 69% year to date.
Garmin, Ltd.GRMN is an original equipment manufacturer (OEM) of navigation and communication equipment that incorporates the global positioning system (GPS)-based technology. This Zacks #2 Ranked stock has a dividend yield of 2.68%, higher than its industry's 1.63%. Moreover, its five-year historical dividend yield is 3.92% and it has a market cap of $16.9 billion.
Shares of the company have jumped 34.4% year to date.
NetEase, Inc. NTES is an Internet technology company engaged in developing applications, services and other technologies for the Internet in China. The #2 Ranked stock has a dividend yield of 1.54%, above the industry’s 0.57%. Moreover, its five-year historical dividend yield is 1.24% and it has a market cap of $36.2 billion.
Shares of the company have rallied 14.9% year to date.
Relx PLC RELX is engaged in providing information solutions. This player has a Zacks Rank of 2 and a dividend yield of 1.43%, higher than its industry’s 0.38%. Moreover, its five-year historical dividend yield is 2.24% and it has a market cap of $24.4 billion.
Shares of the company have returned 11.5% year to date.
5 Stocks Set to Double
Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.
Today, see all 5 stocks with extreme growth potential >>
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Western Digital Corporation (WDC) : Free Stock Analysis Report
RELX PLC (RELX) : Free Stock Analysis Report
NetEase, Inc. (NTES) : Free Stock Analysis Report
Garmin Ltd. (GRMN) : Free Stock Analysis Report
KLA-Tencor Corporation (KLAC) : Free Stock Analysis Report
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