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My 3 Favorite Technology Dividend Stocks - High Growth, Low Beta and Debt
Posted by: Dividend (IP Logged)
Date: November 6, 2012 10:06AM

I often hear that technology stocks are high-growth investments but pay low dividends or no dividends. They sit on tons of cash and search for the next big IT revolution. If they don’t do this, they could lose their current competitive advantage and disappear from the market within the next ten years. We have seen this formation process at Nokia (NOK) or Research In Motion (RIMM). If you think longer about the requirements and risks of the sector, investors should rewarded by a higher return or discount in the stock price to increase the margin of safety.

I made a screen of all dividend stocks within the technology sector (from 879 technology companies pay 201 dividends). But who are the stocks with the highest growth at adequate risks? To get an answer, I selected only stocks with a market capitalization over USD10 billion, a beta ratio of less than one as well as earnings per share growth of more than 10 percent yearly. Nine really solid stocks remained.

These are my favorites:

Accenture (ACN) has a market capitalization of $53.75 billion. The company employs 257,000 people, generates revenue of $29.78 billion and has a net income of $2.82 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4.47 billion. The EBITDA margin is 14.99 percent (the operating margin is 13.00 percent and the net profit margin 9.49 percent).

Financial Analysis: The total debt represents 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 63.64 percent was realized. Twelve trailing months earnings per share reached a value of $3.84. Last fiscal year, the company paid $1.35 in the form of dividends to shareholders. The earnings are expected to grow yearly by 10.56 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.67, the P/S ratio is 1.83 and the P/B ratio is finally 11.09. The dividend yield amounts to 2.39 percent and the beta ratio has a value of 0.86.

QUALCOMM (QCOM) has a market capitalization of $102.93 billion. The company employs 21,200 people, generates revenue of $14.96 billion and has a net income of $4.56 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6.04 billion. The EBITDA margin is 40.35 percent (the operating margin is 33.26 percent and the net profit margin 30.45 percent).

Financial Analysis: The total debt represents 3.20 percent of the company’s assets and the total debt in relation to the equity amounts to 4.32 percent. Due to the financial situation, a return on equity of 19.13 percent was realized. Twelve trailing months earnings per share reached a value of $2.97. Last fiscal year, the company paid $0.81 in the form of dividends to shareholders. The earnings are expected to grow yearly by 14.19 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.37, the P/S ratio is 6.75 and the P/B ratio is finally 3.70. The dividend yield amounts to 1.69 percent and the beta ratio has a value of 0.99.

ARM Holdings (ARMH) has a market capitalization of $15.67 billion. The company employs 2,368 people, generates revenue of $788.06 million and has a net income of $180.49 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $258.84 million. The EBITDA margin is 32.84 percent (the operating margin is 30.29 percent and the net profit margin 22.90 percent).

Financial Analysis: The total debt represents 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 11.52 percent was realized. Twelve trailing months earnings per share reached a value of $0.52. Last fiscal year, the company paid $0.17 in the form of dividends to shareholders. The earnings are expected to grow yearly by 19.83 percent for the next five years.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 65.08, the P/S ratio is 19.65 and the P/B ratio is finally 8.79. The dividend yield amounts to 0.54 percent and the beta ratio has a value of 0.94.

Take a closer look at the full table of the best technology growth stocks with good dividends. The average P/E ratio amounts to 30.26 and forward P/E ratio is 20.35. The dividend yield has a value of 1.32 percent. Price to book ratio is 4.87 and price to sales ratio 5.42. The operating margin amounts to 22.71 percent. The average stock has a debt to equity ratio of 0.41.

Related stock ticker symbols:
ACN, CHA, QCOM, ATVI, AMT, INTU, CHU, ARMH, ROP

Selected Articles:
· 524% Return With The Best Technology Growth Portfolio – Cloud Computing
· 20 Of Americas Biggest Technology Dividend Stocks
· Facebook Is Too Expensive! These Technology Stocks Create A Better Shareholder Value
· Intel (NYSE:INTC) Offers A Yield Of 4.23% At 26.94% Upside Potential

Technology Companies with High Growth and Positive Dividend Payments Researched by “long-term-investments.blogspot.com.”


Stocks Discussed: ACN, CHA, QCOM, ATVI, AMT, INTU, CHU, ARMH, ROP,
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