It has been almost 15 years since we have seen this kind of selling and overall disruption in the technology sector. For many investors who were long the biggest names, it has been a disaster. Most of the mega-cap technology giants have announced massive layoffs, with Amazon joining the fray this week saying it will be giving the pink slip to as many as 10,000 employees. The good news for investors with dry powder is that some of the biggest and best companies are on sale.
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We screened our 24/7 Wall St. technology research universe looking for quality stocks with products and services that are still in demand and, most importantly, will remain so for years to come. Then we looked for stocks that are rated Buy and pay consistent and dependable dividends. These five top companies made the cut, and all make sense for investors with a long-term horizon. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
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Broadcom
This stock has been crushed, and while suitable only for more aggressive investors, Wall Street continues to like the company for dividend growth. 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.
Top analysts and many on Wall Street are very positive on the company’s massive $10 billion share repurchase authorization through December of 2023, which represents about 4.2% of the company’s market cap.
Broadcom stock investors receive a 3.20% dividend. BofA Securities has a $625 price target, but the consensus target is higher at $644.80. The stock closed trading on Thursday at $512.11.
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Cisco Systems
Investors who are more conservative may want to consider this mega-cap tech leader, which posted outstanding quarterly results this week. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
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 and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.
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Its 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.
Shareholders receive a 3.42% dividend. The price target on Cisco Systems stock at Evercore ISI is $56. That compares with the $54.82 consensus target and Thursday’s close of $46.59, which was up almost 5% for the day on the better than expected fiscal first-quarter results.
Dell Technologies
This high-quality company pays a solid dividend and its shares have been hit hard. Dell Technologies Inc. (NYSE: DELL) designs, develops, manufactures, markets, sells and supports information technology (IT) hardware, software and services solutions worldwide. It operates through three segments.
Infrastructure Solutions Group provides traditional and next-generation storage solutions, and rack, blade, tower and hyperscale servers. It 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. It also offers attached software and peripherals, as well as support and deployment, configuration and extended warranty services.
Dell’s The Client Solutions Group offers desktops, notebooks and workstations; displays and projectors; attached and third-party software and peripherals; as well as support and deployment, configuration and extended warranty services.
The VMware segment supports customers in the areas of hybrid and multi-cloud, modern applications, networking, security and digital workspaces, helping customers to manage IT resources across private clouds and complex multi-cloud, multi-device environments.
Dell also provides information security and cloud software and infrastructure-as-a-service solutions that enable customers to migrate, run, and manage mission-critical applications in cloud-based IT environments.
The dividend yield here is 3.21%. The $58 price target at Wells Fargo is a Wall Street high. The consensus target for Dell Technologies stock is $53.49, and Thursday’s close was at $41.76.
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Juniper Networks
This is another familiar name that could offer among the best in 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.
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.
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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.
Investors receive a 2.81% dividend. A $38 price target accompanies Raymond James’s Strong Buy rating. The consensus target is $34.17, and Juniper Networks stock closed at $30.51 on Thursday.
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Microsoft
This is a more conservative way for investors to participate in the massive and ongoing cloud growth. Microsoft Inc. (NASDAQ: MSFT) manufactures, licenses and supports a wide range of software products. The company has transformed its business model from a component-driven model (personal computer, server) to one driven by the need for cloud capacity.
Many Wall Street analysts agree that Microsoft has become a clear number two in the public or hyper-scale cloud infrastructure market with Azure, which is the company’s cloud computing platform offerings, and which continues growing at triple-digit levels. Some have flagged Azure as the biggest rival to Amazon’s AWS service.
Some analysts maintain that Microsoft is discounting Azure for large enterprises, so that Azure may be cheaper than AWS for larger users. The cloud was big in recent earnings reports and will remain a growing part of the software giant’s earnings profile.
Microsoft stock comes with a 1.10% dividend. The UBS price target is $300, and the consensus target is $299.37. The shares closed on Thursday at $241.68.
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All these top companies have been around for decades and have survived tech sell-offs in the past. Each has a strong products or services portfolio, and all will still be around when the damage from the past year is in the rear-view mirror, but they will not be around at today’s prices.
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