GuruFocus provides a High Yield Dividend Stock page for income investors. This feature allows you to sort stocks by business predictability, or whether gurus are currently holding the stock. Further, you can narrow companies down by sector and market capitalization.
The following are five high-yielding companies in the technology sector that gurus are buying.
Seagate Technology PLC (STX, Financial)
Seagate offers a dividend yield of 4.43% — close to the five-year high — while the payout ratio is 34%. NWQ Managers (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) added the company as a new holding in their portfolios during the first quarter, while Joel Greenblatt (Trades, Portfolio) and John Buckingham (Trades, Portfolio) added to their existing stakes during the quarter.
Seagate provides data storage solutions with hard disk drives. The stock dropped 22% over the last year to close at $46.28 on July 13. The company is undervalued according to the Peter Lynch earnings line, which is at $88.40 based on first quarter earnings.
Over the past five years, EBITDA per share increased by about 18%, recording at $7.58 in 2014. In the preliminary earnings for Q4 2015, Seagate said it expected to report $2.9 billion in revenue, down from the previously forecasted range of $3.2-3.3 billion. The official earnings will be released on July 31.
Jim Simons (Trades, Portfolio) and Louis Moore Bacon (Trades, Portfolio) each initiated a new position in Garmin during the first quarter, while Murray Stahl (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) increased their stakes. Garmin’s dividend yield is 4.2%, and the payout ratio is 119%.
Garmin produces hand-held, wrist-based and portable GPS devices. The company began in 1989 by making GPS devices for planes, and while the segment still accounts for 15% of revenue, Garmin is a major player in the wearable tech market. Its GPS watches are popular among serious runners and athletes. The stock declined 19% in the past year, closing at $46.37 on July 13. Its P/E ratio is 28.8 and the P/S ratio is 3.12.
In 2014, net income was $364 million, down from $612 million the year before. The graph below shows the income trend over time.
Quality Systems (QSII, Financial)
Joel Greenblatt (Trades, Portfolio), Paul Tudor Jones (Trades, Portfolio), and Jim Simons (Trades, Portfolio) currently hold positions in Quality Systems as of the first quarter. The dividend yield is 4.22%, while the payout ratio is 156%.
Quality Systems provides high-speed fixed and mobile broadband services. The stock rose 10% in the past year and closed at $16.47 on July 13. The P/E ratio is 37.07 and the P/S ratio is 2.04.
Over the past five years, revenue grew by 8.9%, but EBITDA declined by 11.9%. EBITDA per share in FY 2015 was $1.07, up from $0.86 the year before.
Quality Systems’ free cash flow has been steadily increasing over the years, recording at $61.6 million in 2015. Over the last five years, free cash flow increased by 6.5%. For Q4 2015 ended March 31, the company reported net income of $10.7 million, which increased an impressive 107% over the year-ago period.
Paul Tudor Jones (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) both added Landauer as new holdings in their portfolios during Q1, while Chuck Royce (Trades, Portfolio) is the largest shareholder with 0.14% of shares outstanding. The current dividend yield is 4.34%, which is close to the two-year low. The payout ratio is a high 733%.
Landauer provides technical and analytical services to determine occupational and environmental radiation. This includes complete radiation dosimetry services to hospitals, medical and dental offices, universities, national laboratories, nuclear facilities and other industries in which radiation poses a potential threat to employees. The stock declined 12% in the past year, closing at $37.98 on July 14.
Revenue for Q2 2015 declined 2.6% from the year-ago quarter to $38.1 million. This was due to unfavorable foreign currency exchange rates, as well as a decrease in sales in Europe. Net income also declined to $3.5 million from $4.5 million in the year-ago quarter. The graph below shows the company’s annual net income over time.
SouFun Holdings (SFUN, Financial)
George Soros (Trades, Portfolio) initiated a new stake in SouFun during Q1, purchasing 1,426,282 shares of the company. Chris Davis (Trades, Portfolio), Steven Cohen (Trades, Portfolio), and Jim Simons (Trades, Portfolio) increased their stakes during the quarter. Chris Davis (Trades, Portfolio) is currently the largest guru shareholder with 5.11% of shares outstanding. The current dividend yield is 15.65%, and the payout ratio is 252%.
SoFun is a real estate internet portal in China that operates home furnishing and improvement websites. The company is domiciled in the Cayman Islands. The stock price is down 24% in the past year and closed at $7.67 on July 14. The current P/E ratio is 15.62 and the P/S ratio is 4.97.
EBITDA per share in 2014 was $0.79, down from $0.93 the year before.
Last year, SoFun reported net income of $253.2 million, down from $298.6 million. Over the past five years, net income increased by 47%. Free cash flow, however, declined to $206.5 million from $401.3 million in 2013.
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