Amid rising concerns regarding the rapid spread of the COVID-19 Delta variant, which could precipitate a market correction, dividend-paying companies are ideal for hedging that risk. Also, given the tech industry’s solid growth prospects, betting on dividend-paying tech stocks could be even more rewarding. Therefore, we think tech stocks International Business Machines (NYSE:IBM), Seagate (STX), Hewlett Packard (HPE), and Xerox (NYSE:XRX), which deliver high dividend yields, could prove to be valuable additions to one’s portfolio now. Read on.Dividend stocks have been regaining momentum recently because investors have been hedging their portfolios against a decelerating economic recovery and surging market volatility by seeking holdings that deliver steady income streams. This is evidenced by iShares Select Dividend ETF’s (DVY) 2% gains over the past five days versus the benchmark S&P 500 index’s 0.9% returns.
Despite major indexes hitting their all-time highs over the past two weeks, rising investor concerns regarding the rapid spread of the COVID-19 Delta variant, and consequent re-imposition of mask mandates and potentially other restrictions in the United States, have increased market volatility significantly. The CBOE Volatility index has gained 14.3% over the past month. Furthermore, the decelerating economic recovery is evidenced by the disappointing 6.5% GDP growth rate in the second quarter. It is nearly two percentage points short of the Dow Jones 8.4% consensus estimate. With the Fed recently reiterating its near-zero interest rate stance, high-yielding dividend stocks could be ideal investment bets for income investors. Furthermore, tech stocks are expected to perform well amid rising COVID-19 related concerns as companies continue to operate through remote structures.
Given this backdrop, we believe high-yield tech stocks International Business Machines Corporation ( IBM ), Seagate Technology Holdings plc (STX), Hewlett Packard Enterprise Company (NYSE:HPE), and Xerox Holdings Corporation (XRX), with stable dividend payout histories, should be the good bets now.