When you hear the names Cisco (CSCO), Oracle (ORCL), Apple (AAPL), Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC), "dividend stocks" is probably not the first thought to enter your mind. It wasn't that long ago that tech companies simply didn't pay dividends. Every penny earned was plowed back into the business. The entire focus was on growth, and investors were looking for capital gains.
Long considered the domain of momentum or growth investors, many tech stocks have matured and begun paying a reasonable dividend. Granted, the tech sector hasn't garnered the same following from income investors as traditional higher-yielding sectors such as consumer defensive, healthcare and financial services. However, there are several valid tech options to consider that will pay us a growing income stream while diversifying our portfolios.
This week, I screened my dividend growth stocks database for technology companies with a yield at or above 2.5% that have increased their dividends for at least nine consecutive years. The results are presented below:
Microsoft Corporation (NASDAQ:MSFT), the world's largest software company, develops PC software, including the Windows operating system and the Office application suite. The company has paid a cash dividend to shareholders every year since 2003 and has increased its dividend payments for nine consecutive years. Yield: 2.7%
Intel Corporation (NASDAQ:INTC) is the world's largest manufacturer of microprocessors, the central processing units of PCs, and also produces other semiconductor products. The company has paid a cash dividend to shareholders every year since 1992 and has increased its dividend payments for nine consecutive years. Yield: 3.2%
Linear Technology Corp. (NASDAQ:LLTC) manufactures high-performance linear integrated circuits. The company has paid a cash dividend to shareholders every year since 1992 and has increased its dividend payments for 19 consecutive years. Yield: 3.4%
Harris Corporation (NYSE:HRS) focuses on communications equipment for voice, data and video applications for commercial and governmental customers. The company has paid a cash dividend to shareholders every year since 1941 and has increased its dividend payments for 11 consecutive years. Yield: 3.4%
Watsco Inc. (NYSE:WSO) is the largest U.S. distributor of air-conditioning, heating and refrigeration equipment, and related products. The company has paid a cash dividend to shareholders every year since 1984 and has increased its dividend payments for 11 consecutive years. Yield: 3.6%
As with past screens, the data presented above is in its raw form. Some of the the companies would be disqualified for poor dividend fundamentals. However, some of the others may be worth additional due diligence.
My database, D4L-Data, is an Open Office spreadsheet containing more than 30 columns of information on the more than 210 companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long MSFT, INTC. See a list of all my dividend growth holdings here.
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