Investors are used to certain types of stocks to yield worthwhile dividends. These are typically real estate investment trusts (REITs), banks, payment processors, large utility or consumer staple companies. In contrast, high-growth companies like Amazon (NASDAQ:AMZN) tend to reinvest in the business.
Soon after Texas Instruments (NASDAQ:TXN), Apple (NASDAQ:AAPL) experimented with dividends from 1987 to 1995, only to stop until reissuing in 2012. Although AAPL dividend yield is still low at 0.54%, the company uses a proxy shareholder return via record-breaking stock buybacks.
According to Morningstar, compared to the financial services sector, which comprised 43% of dividend growth in 2003, the tech sector only constituted 2.10%. By 2023, we are seeing much greater sector diversification, with financial firms making 23.57% while dividend-paying tech stocks increased to 9% share.
Meta Platforms (NASDAQ:META) and Alphabet (NASDAQ: GOOGL) announced dividend payouts this year. This marks a wider tech industry shift to keep their stock momentum going by enticing a wider investor base to enroll.
Here are three established tech stocks that investors should consider for dividend payouts.
Qualcomm – 1.77% dividend yield at $3.20 annual payout per share
Year-to-date, this chipmaker and holder of many licensed tech patents significantly outperformed AMD (NASDAQ: AMD) at 30% vs. 9.50% returns, respectively. While AMD started slipping in early March, Qualcomm Incorporated (NASDAQ:QCOM)stock gained 20% value in the last three months.
At the present price level of $180.54, QCOM shares are 44% above the 52-week low of $101.47 per share. Qualcomm dominates the global smartphone application processor (AP) shipments even more so than Apple. As of Q4 2023, the company holds a 23% share, behind MediaTek’s 36% and ahead of Apple’s 20% share, per Counterpoint Research.
In the second half of 2024, Qualcomm is set to launch new Snapdragon 8S Gen3 and 7 Plus Gen 3 mobile platforms, harnessing AI power to the flagship smartphone sector. For Q2 2024, the company reported strong earnings. Net income increased 14% year-over-year with notable automotive division revenue growth of 35% to $603 million.
Compared to net cash from operations of $4.5 billion in 2023, Qualcomm increased it to $6.5 billion. For Q3 FY24, the company set an outlook revenue of $8.8 – $9.6 billion range, from Q2’s $9.4 billion. Accordingly, Nasdaq’s forecast sees a modest average price target of $187.05 vs the current $180.54 per share.
Meta Platforms – 0.42% dividend yield at $2 annual payout per share
Declared the winner of Magnificent Seven earnings in February, Meta announced its first-ever quarterly dividend in Q4 2023 earnings, to be paid on March 26th, 2024. Like Apple, Meta used a dual approach to boosting shareholder returns, authorizing $50 billion worth of stock buybacks.
Year-to-date, META stock is up 36%. From its 52-week low of $235.33, its price is now $475.42. Mark Zuckerberg spread his company across multiple pies, effectively dominating the VR/AR sector with Oculus Quest headsets, while Meta’s metaverse division Reality Labs is yet to produce profits.
Nonetheless, Meta’s deep pockets from online advertising across social media platforms, significantly boosted with AI tools, give the company ample space for R&D to continue as a metaverse stock. For Q1 2024, Meta reported 27% year-over-year revenue growth to $36.4 billion, delivering a 117% increase in net income of $12.3 billion.
In other words, Meta occupies many attractive niches for investors—blue chip, growth tech, metaverse, and now dividend stock with generous stock buybacks to boot. Nasdaq’s average price target for META is $522.49 vs. the current $475.42 per share.
Salesforce – 0.58% dividend yield at $1.60 annual payout per share
Salesforce Inc (NYSE:CRM) cornered the market on cloud-based customer relationship management (CRM) with an estimated 26.47% market share. For comparison, all other CRM platforms have under 6% shares, including Microsoft (NASDAQ:MSFT) Dynamics CRM, which has 4.29%.
These services are typically subscription-based, giving Salesforce a stable and predictable revenue stream. The company announced its first-ever dividend in February, with the payment date on April 11th, at a quarterly cash of $0.40 per share.
In February, Salesforce released its Q4 2024 (fiscal) earnings, showing 11% year-over-year revenue growth to $9.29 billion and full-year net income of $4.1 billion vs. $208 million the year prior. In addition to the new dividend inflow, Salesforce authorized a $10 billion share repurchase program, having returned $11.7 billion to shareholders since inception.
For full-year FY25 guidance, Salesforce gave 8% – 9% year-over-year revenue growth up to $38 billion. Year-to-date, CRM stock gained 7.4% value. Nasdaq’s average price target for CRM shares is now $339.32 vs the current $275.30 per share.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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