As has been the case for years, the technology sector continues to provide much of the growth in the U.S. markets and around the world. But what if you want to own technology stocks, but you also need income? Last week, the 10-year Treasury bond yield hit the lowest level since February, and the S&P 500 yield is at its lowest in 20 years. So what are investors with a higher risk tolerance that need income and growth to do?
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One great idea is to look at the technology stocks that also pay solid and dependable dividends. We screened our 24/7 Wall St. research universe looking for well-known technology companies that pay big dividends, and have solid growth prospects for the rest of 2021 and beyond. We found five that look like outstanding ideas now. They are all rated Buy at top Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decisions.
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Broadcom
The company consistently has reported solid earnings, and it is on the BofA Securities US 1 list of top stock picks. Broadcom Inc. (NASDAQ: AVGO | AVGO Price Prediction) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, servers and storage, factory automation, power generation and alternative energy systems and displays.
The dividend yield is 3.03%. BofA Securities has a huge $580 price target on the shares, and the consensus target is $530.62. Broadcom stock closed trading on Wednesday at $477.65 a share.
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Hewlett Packard Enterprise
This was a spin-off from a Silicon Valley legend and holds solid upside potential. Hewlett Packard Enterprise Co. (NYSE: HPE) provides solutions that allow customers to capture, analyze and act upon data seamlessly.
The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE BladeSystem, HPE Synergy and HPE ProLiant; storage solutions; and solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE Modular Storage Arrays and HPE XP. It also offers HPE Apollo and Cray products, as well as HPE Superdome Flex, HPE Nonstop, HPE Integrity, HPE Moonshot, and HPE Edgeline products.
HPE provides mobility and Internet of Things solutions under the Aruba brand, which include Wi-Fi access points, switches, routers and sensors; cloud-based management, network management, network access control, analytics and assurance, and location services; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products.
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The company also offers various leasing, financing, IT consumption and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of complete IT solutions, including hardware, software and services from HPE and others. Further, the company invests in communications and media solutions, Hewlett Packard labs and various business incubation projects.
Investors receive a 3.35% dividend. Evercore ISI just upgraded the stock to Outperform this week and also boosted its price target to $20 from $16. The consensus target is $17.16, and Hewlett Packard Enterprise stock closed on Wednesday at $14.46.
IBM
This old-school tech giant still offers investors a very solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions.
The company integrates its hardware products with its software and services offerings in order to provide high-value solutions. Analysts have cited the company’s potential in the public cloud as a reason for their positive outlook going forward.
The company posted solid second-quarter results recently. The cloud proved to be big in the earnings reports, as did Red Hat, the software giant the firm bought in 2019. Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation and industry expertise and sales leadership in more than 175 countries.
Investors in IBM stock receive a 4.60% dividend. BofA Securities reiterated its Buy rating after the stellar earnings report and raised the price target to $176. That compares with the $144.12 consensus target and Wednesday’s closing print of $141.77.
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Juniper Networks
This is another familiar name that could offer among the best total return potential. Juniper Networks Inc. (NYSE: JNPR) designs, develops and sells network products and services worldwide. The company offers various routing products, such as ACX series universal access routers to deploy new high-bandwidth services; MX series Ethernet routers that function as a universal edge platform; PTX series packet transport routers; and NorthStar controllers.
The company 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.
In addition, the company offers security products including 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; and advanced malware protection, a cloud-based service and Juniper ATP.
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Its Junos OS is a network operating system, and its Contrail is a networking and cloud platform that provides an open-source and standards-based platform for SDN and NFV. Contrail Insights is an optimization and management software platform for public, private, and hybrid clouds, while Mist AI-driven Wired, Wireless and WAN assurance solutions set and measure key metrics. Its Mist AI-driven Marvis Virtual Network Assistant identifies the root cause of issues, and Netrounds is a software-based active test and service assurance platform.
Investors receive a 2.90% dividend. MKM Partners upgraded Juniper Networks stock to Buy this week after the company posted solid second-quarter results. The firm also lifted the price target to $33 from $26. The posted consensus target is $26.06. The shares closed at $26.98 on Wednesday.
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Seagate
This disk drive giant is hitting on all cylinders and looks reasonable at current trading levels. Seagate Technology Holdings PLC (NASDAQ: STX) provides data storage technology and solutions in Singapore, the United States, the Netherlands and elsewhere.
The company offers hard disk and solid state drives, including serial advanced technology attachment, serial attached SCSI and non-volatile memory express products; solid state hybrid drives; and storage subsystems. Its products are used in enterprise servers and storage systems and edge compute and non-compute applications.
Seagate also provides an enterprise data solutions portfolio, comprising storage subsystems and mass capacity optimized private cloud storage solutions for enterprises, cloud service providers and scale-out storage servers and original equipment manufacturers. 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 in capacities up to 16TB.
Shareholders enjoy a 3.15% dividend. Morgan Stanley lifted the price target to $118 from $114 after the company posted sparkling earnings. The consensus target for Seagate Technology stock is down at $102.90. It closed on Wednesday at $86.60 a share.
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These five top technology companies pay solid and dependable dividends. Given the technology run, and the very rich and overbought market, it may make sense to scale buy into a position in one or more of these top companies.
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