Technology is hot and driving stock market gains

Ten companies have made up 95% of the gains in the S&P 500, and nine of the ten heaviest-weighted stocks in the Nasdaq 100 have accounted for almost all the profits. What do these stocks have in common? They are nearly all technology stocks, and the technology sector likely continues to drive the upside for the rest of the year.

Is it time to take profits on the “Magnificent 7”?

While all the major firms have continued to pound the table on the “Magnificent 7,” they are all becoming overpriced and could take a big hit in a massive market sell-off. NVIDIA Corporation (NASDAQ: NVDA) posted enormous quarterly profits and promptly sold off.

Wall Street says stick with Technology for 2024

Over the last year, technology has been in the spotlight as layoffs have been massive. Amazon.com (NASDAQ: AMZN) is laying off nearly 20,000 employees. Does that mean the industry is doomed? Not at all; the massive belt-tightening is due to the over-hiring and growth spurt that was a product of the COVID-19 pandemic, and to increase earnings, big tech is cutting costs.

Roll profits to legacy dividend-paying tech stocks

We screened our 24/7 Wall St. technology research universe, looking for companies that are buy-rated on Wall Street and pay dividends higher than the S&P 500, which currently stands at 1.52%, a 15-year low.

Cisco

This mega-cap tech leader for more conservative accounts is paying a 1.56% dividend. Cisco Systems, Inc. (NASDAQ: CSCO) designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the worldwide communications and information technology industry.

Cisco provides switching products, including fixed-configuration and modular switches and storage products that provide connectivity to end users,

• Workstations,
• IP phones,
• Wireless access points
• Servers
• Next-generation network routing products interconnect public and private wireline and mobile networks for mobile, data, voice, and video applications.

Cisco cybersecurity products give clients the scope, scale, and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.

Corning

This company remains a massive player in the fiber optic world and pays a hefty 3.98% dividend. Corning Inc. (NYSE: GLW) is a technology pioneer that manufactures LCD glass for flat-panel displays for multiple product lines.

Telecommunications produces

• Optical fiber and cable,
• Component hardware and equipment, and
• Photonic components for the telecommunications, CATV, and networking industries.

The company’s Environmental Technologies division produces specialized glass, glass-ceramic, and polymer-based products for the automotive industry.

Dell Technologies

This is a high-quality company paying a solid 2.01% dividend. Dell Technologies, Inc. (NYSE: DELL) designs, develops, manufactures, markets, sells, and supports information technology (IT) solutions, products, and services worldwide.

The company operates through three segments:

• Infrastructure Solutions Group
• Client Solutions Group
• VMware

The ISG segment provides traditional and next-generation storage solutions and rack, blade, tower, and hyperscale servers. This segment also offers networking products and services that help its business customers to transform and modernize their infrastructure, mobilize and enrich end-user experiences, and accelerate business applications and processes; attached software and peripherals; and support and deployment, configuration, and extended warranty services.

The CSG segment provides desktops, workstations, and notebooks; displays and projectors; attached and third-party software and peripherals; and support, deployment, configuration, and extended warranty services.

The VMware segment supports customers in hybrid and multi-cloud, modern applications, networking, security, and digital workspaces, helping customers manage IT resources across private clouds and complex multi-cloud, multi-device environments.

Dell Technologies Inc. also provides information security, cloud software, and infrastructure-as-a-service solutions that enable customers to migrate, run, and manage mission-critical applications in cloud-based IT environments.

International Business Machines

This blue-chip giant still offers investors a solid entry point, a massive 4.31% dividend, and a degree of safety for more conservative investors. International Business Machines (NYSE: IBM) provides integrated solutions and services worldwide.

The company operates through four business segments:

• Software
• Consulting
• Infrastructure
• Financing

The Software segment offers hybrid cloud platforms and software solutions, such as Red Hat, an enterprise open-source solution; software for business automation, AIOps and management, integration, and application servers; data and artificial intelligence solutions; and security software and services for threat, data, and identity. This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in the banking, airlines, and retail industries.

The consulting segment offers business transformation services, including strategy, business process design and operations, data and analytics, system integration, technology consulting, and application and cloud platform services.

The Infrastructure segment provides on-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads, support services and solutions for hybrid cloud infrastructure, and remanufacturing and remarketing services for used equipment.

The Financing segment offers lease, installment payments, loan financing, and short-term working capital financing services.

Juniper Networks

This is another familiar name that could be offering among the best total return potential with a hefty 3.28% dividend. Juniper Networks, Inc. (NASDAQ: JNPR) designs, develops, and sells network products and services worldwide.

The company offers routing products:

• ACX series universal access routers to deploy high-bandwidth services
• MX series Ethernet routers that function as versatile edge platforms
• PTX series packet transport routers
• NorthStar controllers

Juniper Networks also provides switching products, including EX series Ethernet switches to address the access, aggregation, and core layer switching requirements of micro branch, branch office, and campus environments; QFX series of core, spine, and top-of-rack data center switches; and juniper access points, which provide wireless access and performance.

The company also offers security products comprising

• SRX series services gateways for the data center
• Branch SRX family provides an integrated firewall and next-generation firewall
• Virtual firewall that delivers various features of physical firewalls
• advanced malware protection, a cloud-based service
• Juniper ATP

Seagate

This disk drive giant looks reasonable at current trading levels, especially with a 3.68% dividend. Seagate Technology Holdings plc (NASDAQ: STX) provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally.

The company offers hard disk and solid state drives, including serial advanced technology attachment, serial attached SCSI, non-volatile memory express products, solid state hybrid drives, and storage subsystems. Its products are used in enterprise servers, storage systems, edge computing, and non-compute applications.

Seagate also provides an enterprise data solutions portfolio comprising storage subsystems and mass capacity-optimized private cloud solutions for enterprises, cloud service providers, scale-out storage servers, and original equipment manufacturers (OEMs).

In addition, it offers external storage solutions under the Seagate Backup Plus and Expansion product lines, as well as under the LaCie and Maxtor brands, with capacities of up to 16 terabytes.

Texas Instruments

This old-school legacy semiconductor tech company offers solid value at current levels, paying a solid 3.39% dividend. Texas Instruments Inc. (NASDAQ: TXN) is a broad-based supplier of semiconductor components, ranging from digital signal processors to high-performance analog components to digital light-processing technology and calculators.

65% of the company’s sales are exposed to:

• Business-to-business Industrial
• Automotive
• Communications Infrastructure
• Enterprise markets

The company is also a significant Apple supplier, so the long-term outlook for this venerable leader makes it a safer bet for investors with less risk tolerance.

 

 

 

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.