Sure Dividend

Updated on September 27th, 2022 by Bob Ciura

Spreadsheet data updated daily

The technology industry is one of the most exciting areas of the stock market, known for its rapid growth and propensity to create rapid and life-changing wealth for early investors.

Until recently, the technology sector was not known for being a source of high-quality dividend investment ideas. This is no longer the case.

Today, some of the most appealing dividend stocks come from the tech sector.

With that in mind, we’ve compiled a list of all 200+ technology stocks complete with important investing metrics, which you can access below:

 

The holdings of the technology stocks list were derived from the following major exchange-traded funds:

1. Invesco QQQ ETF (QQQ)
2. Technology Select Sector SPDR ETF (XLK)
3. Invesco S&P SmallCap Information Technology ETF (PSCT)

Keep reading this article to learn more about the benefits of investing in dividend-paying technology stocks.

In addition to providing a full spreadsheet of tech stocks and how to use the spreadsheet, we give our top 10-ranked tech stocks today in terms of 5-year expected annual returns.

Table Of Contents

The following table of contents allows you to instantly jump to any section:

• How To Use The Tech Stocks List
• Why Invest In The Technology Sector?
• The Top 10 Tech Stocks Today
  Tech Dividend Stock #10: Western Union (WU)
  Tech Dividend Stock #9: Applied Materials, Inc. (AMAT)
  Tech Dividend Stock #8: Oracle Corporation (ORCL)
  Tech Dividend Stock #7: KLA Corporation (KLAC)
  Tech Dividend Stock #6: Monolithic Power Systems, Inc. (MPWR)
  Tech Dividend Stock #5: Microchip Technology (MCHP)
  Tech Dividend Stock #4: Analog Devices, Inc. (ADI)
  Tech Dividend Stock #3: HP Inc. (HPQ)
  Tech Dividend Stock #2: Qualcomm Inc. (QCOM)
  Tech Dividend Stock #1: Lam Research (LRCX)

How To Use The Technology Stocks List To Find Dividend Investment Ideas

Having an Excel document containing the names, tickers, and financial metrics for all dividend-paying technology stocks can be extremely powerful.

The document becomes significantly more powerful if the user has a working knowledge of Microsoft Excel.

With that in mind, this section will show you how to implement two actionable investing screens to the technology stocks list. The first screen that we’ll implement is for stocks with dividend yields above 3%.

Screen 1: High Dividend Yield Technology Stocks

Step 1: Download the technology stocks list at the link above.

Step 2: Click on the filter icon at the top of the dividend yield column, as shown below.

Step 3: Change the filter setting to “Greater Than” and input 0.03 into the field beside it, as shown below.

The remaining stocks in this spreadsheet are dividend-paying technology stocks with dividend yields above 3%, which provide a basket of securities that should appeal to retirees and other income-oriented investors.

The next section will show you how to simultaneously screen for stocks with price-to-earnings ratios below 20 and market capitalizations above $10 billion.

Screen 2: Low Price-to-Earnings Ratios, Large Market Capitalizations

Step 1: Download the technology stocks list at the link above.

Step 2: Click on the filter icon at the top of the price-to-earnings ratio column, as shown below.

Step 3: Change the filter setting to “Less Than” and input 20 into the field beside it, as shown below.

Step 4: Exit out of the filter window (by clicking the exit button, not by clicking the Clear Filter button). Then, click on the filter icon at the top of the market capitalization button, as shown below.

Step 5: Change the filter setting to “Greater Than” and input 10000 into the field beside it, as shown below. Note that since market capitalization is measured in millions of dollars in this spreadsheet, inputting “$10,000 million” is equivalent to screening for stocks with market capitalizations above $10 billion.

The remaining stocks in the Excel spreadsheet are dividend-paying technology stocks with price-to-earnings ratios below 20 and market capitalizations above $10 billion. The size and reasonable valuation of these businesses make this a useful screen for value-conscious, risk-averse investors.

You now have an understanding of how to use the technology stocks list to find investments with certain financial characteristics. The remainder of this article will discuss the relative merits of investing in the technology sector.

Why Invest In The Technology Sector?

The technology industry is known for having some of the best-performing stocks over short periods of time. Indeed, it’s hard to overstate how much wealth was created for the early investors in companies like Microsoft (MSFT) or Apple (AAPL).

In addition, the technology sector is highly diversified.  It includes everything from social media companies to semiconductor stocks.  The technology sector itself is not a monolith; there are many types of businesses within the sector.

Unfortunately, the technology industry is also known for causing one of the most dramatic stock market bubbles on record. The 2000-2001 dot-com bubble destroyed billions of dollars of market value because technology stocks were trading at such irrationally high valuations.

Source: YCharts

This notable bear market might lead some investors to avoid the technology sector entirely.

Fortunately, today’s technology sector is tremendously different from its predecessor in the early 2000s. While technology stocks were previously valued based on page views or other vanity metrics, this school of thought has changed significantly.

Today’s technology stocks are valued based on the same yardsticks as other businesses: earnings, free cash flow, and, to a lesser extent, assets.

Moreover, careful security analysis allows investors to find undervalued technology stocks and profits, just as with any other industry.

Investors might also avoid tech stocks because of a perceived inability to understand how they make money. While some investors ignore technology stocks because of their harder-to-understand business models, it’s important to note that not all technology stocks have business operations that are shrouded in complexity.

As an example, Apple has a very simple business model. The company manufactures and sells iPhones, Apple computers, and wearable devices.

Moreover, one could argue that Apple’s greatest strength is not its technology, but its brand – similar to many non-technology companies like the Coca-Cola Company (KO), Procter & Gamble (PG), and Colgate-Palmolive (CL).

Importantly, there are opportunities similar to Apple throughout the sector – not all technology stocks have competitive advantages that are based on microchip capacity or cloud computing speed.

The last reason why technology stocks can play an important role in your investment portfolio is that they have the potential to be very strong dividend stocks.

Historically, the technology sector was devoid of any appealing dividend investments because technology firms reinvested all money to drive rapid organic growth.

This is no longer the case, at least not in general. Many technology firms now pay steadily rising dividends year in and year out.

The profits of these large, stable technology companies are only growing. And, many technology firms have fairly low payout ratios.

These factors lead us to believe that the technology sector will continue to provide strong dividend growth investment opportunities for the foreseeable future.

The Top 10 Tech Stocks Today

With all that said, the following 10 stocks represent our highest-ranked tech stocks in the Sure Analysis Research Database, in terms of 5-year expected annual returns.

Rankings are listed in order of expected total annual returns, in order from lowest to highest.

Tech Dividend Stock #10: Western Union (WU)

• 5-Year Annual Expected Returns: 15.4%

The Western Union Company is the world leader in the business of domestic and international money transfers. The company has a network of approximately 550,000 agents globally and operates in more than 200 countries. About 90% of agents are outside of the US. Western Union operates three business segments, Consumer-to-Consumer (C2C), Business Solutions, and Other (bill payments in the US and Argentina). Approximately 87% of revenue is now from C2C, 8% from Business Solutions and 5% from Other. The company had ~$5.1B in revenue in fiscal 2021.

Western Union reported poor Q2 2022 results on August 3rd, 2022. Company-wide revenue fell (-12%) to $1,138.3M from $1,289.7M and diluted GAAP earnings per share decreased (-7%) to $0.50 in the quarter compared to $0.54 in the prior year. Revenue declined because of lower revenue and volumes in North America, Europe, and Asia. The conflict in Ukraine is reducing business and Western Union closed its operations in Russia and Belarus.

Source: Investor Presentation

Despite lower revenue, operating margins trended higher softening the impact on the bottom line. C2C revenue declined (-9%) to $1,026.9M from $1,127.1M on a year-over-year basis due to lower transaction volumes. Digital Money Transfer C2C revenues decreased (-6%) and digital money transfer volume fell (-13%). Cross border transaction fell (-8%). Business Solutions revenue declined (-64%) to $35.7M from $99.3M. Other revenue increased 19% to $75.7M from $63.3M.

Western Union maintained adjusted earnings per share guidance to $1.75 – $1.85 in 2022 and now expects revenue to decline (-11%) to (-13%).

Click here to download our most recent Sure Analysis report on WU (preview of page 1 of 3 shown below):

 

Tech Dividend Stock #9: Applied Materials, Inc. (AMAT)

• 5-Year Annual Expected Returns: 15.6%

Applied Materials is a large-cap technology company with three reporting segments: Semiconductor Systems, Applied Global Services, and Display & Adjacent Markets. The company generates more than $25 billion in annual revenue.

Source: Investor Presentation

The company reported third quarter earnings on August 18th, 2022, and results were much better than expected on both the top and bottom lines. Adjusted earnings-per-share came to $1.94, which was 15 cents ahead of estimates. Revenue was up 5.2% to $6.52 billion, and was $250 million ahead of expectations.

Gross margins moved lower year-over-year to 46.1% from 47.9%.Cash from operations was $1.47 billion, and returned $1.23 billion to shareholders via $1 billion in repurchases, and the balance in cash dividends.

The company guided for $6.65 billion in fourth quarter revenue, plus or minus $400 million, which includes ongoing supply chain challenges. Adjusted earnings-per-share is expected in a range of $1.82 to $2.18.

Click here to download our most recent Sure Analysis report on AMAT (preview of page 1 of 3 shown below):

Tech Stock #8: Oracle Corporation (ORCL)

• 5-Year Annual Expected Returns: 15.7%

Oracle is an information technology company that provides software, hardware, and services. Its offerings include applications, platforms, and infrastructure technologies (cloud software), hardware products such as servers, hardware-related software products (e.g., operating systems) and services such as consultation & education.

Oracle reported its most recent quarterly results, for its fiscal fourth quarter, on June 20. The company announced that it generated revenues of $11.8 billion during the quarter, which represents an increase of 5% year over year.

Source: Investor Presentation

Most of Oracle’s revenue was generated by its cloud computing offerings, which continue to gain revenue share. Oracle generated earnings-per-share of $1.54 during the fourth quarter, which was flat versus the prior year’s quarter, but which beat the consensus estimate easily. In prior quarters, Oracle’s earnings-per-share growth was higher mainly thanks to stronger margins, whereas earnings growth slowed down during the most recent quarter.

Click here to download our most recent Sure Analysis report on ORCL (preview of page 1 of 3 shown below):

Tech Dividend Stock #7: KLA Corporation (KLAC)

• 5-Year Annual Expected Returns: 16.4%

KLA Corporation is a supplier to the semiconductor industry. The company supplies process control and yield
management systems for semiconductor producers such as TSMC, Samsung and Micron. KLA was created in 1997,
through a merger between KLA Instruments and Tencor Instruments, and has grown through a range of acquisitions
since then.

The company has generated strong revenue growth in the past decade.

Source: Investor Presentation

KLA Corporation reported its fourth quarter (fiscal 2022) earnings results on July 28. The company reported revenues of $2.49 billion for the quarter, which represents an increase of 29% compared to the prior year’s quarter. This revenue growth rate was stronger than what the analyst community had expected, as KLA’s top line beat the analyst consensus by $70 million.

Revenue gerformance can be explained by the fact that many semiconductor companies have increased their investments into manufacturing capacity thanks to ongoing strong chip demand.

KLA generated earnings-per-share of $5.81 during its fourth quarter, which beat estimates by $0.32, and was up by 31% compared to the previous year’s quarter. This follows strong earnings growth in recent quarters. The company is guiding for revenues of $2.6 billion for the current quarter, its fiscal Q1, and sees earnings-per-share of $6.25.

Click here to download our most recent Sure Analysis report on KLAC (preview of page 1 of 3 shown below):

Tech Dividend Stock #6: Monolithic Power Systems, Inc. (MPWR)

• 5-Year Annual Expected Returns: 16.9%

Monolithic Power Systems is a leading semiconductor company that designs, develops, and markets high-performance power solutions. The company utilizes its deep system-level and applications expertise to develop highly integrated monolithic systems used in computing and storage, automotive, industrial, communications, and consumer applications industries.

Monolithic Power generates around $1.2 billion in annual revenues. The company operates a diversified business model.

Source: Investor Presentation

On August 1st, 2022, Monolithic Power reported its Q2-2022 results. For the quarter, revenues grew by 57.2% year-over-year to $461 million, once again powered by Monolithic’s diversified growth strategy, technological innovation, investment in production capacity, and, importantly, broad-based market share gains.

Notably, Storage and Computing revenues grew by 112% to $122.3 million, while Enterprise Data revenues jumped to $65.2 million, a gain of 118% versus the prior-year period.

Monolithic expects Q2 revenues in the range of $480 million to $500 million, suggesting year-over-year growth of 51.7% at the midpoint of this outlook. Following strong top-line growth, adjusted EPS skyrocketed by 105% to $2.46.

Click here to download our most recent Sure Analysis report on MPWR (preview of page 1 of 3 shown below):

Tech Stock #5: Microchip Technologies (MCHP)

• 5-Year Annual Expected Returns: 17.4%

Microchip Technology develops, manufactures, and sells smart, connected and secure embedded control solutions used for a wide variety of applications.

These include disruptive growth trends such as 5G, artificial intelligence, Internet of Things (IoT), and autonomous driving, amongst others, in key end markets such as automotive, aerospace and defense, communications.

The company’s strategic focus is that these solutions are cost–effective, offer high performance, with a wide voltage range operation, at extremely low power usage. Microchip Technology generates around $6 billion in annual revenues.

On August 2nd, Microchip Technology raised its dividend by 9.1% to a quarterly rate of $0.301. On a year-over-year basis, the dividend grew by 37.8%.

In the fiscal 2023 first quarter, net sales were a record $1.96 billion, up 25.1% from the comparable period last year and 6.5% higher sequentially. Higher revenues were again powered by exceptional execution on delivering Microchip’s backlog and strong underlying demand despite the ongoing manufacturing capacity constraints amid supply chain constraints.

Due to a higher production scale, GAAP gross margins reached a record of 66.7% for the quarter, leading to a record net income of $507.2 million or $0.90 per diluted share. On a non-GAAP basis, EPS was $1.37 versus $0.99 in Q1-2022.

Click here to download our most recent Sure Analysis report on Microchip Technologies (preview of page 1 of 3 shown below):

Tech Dividend Stock #4: Analog Devices, Inc. (ADI)

• 5-Year Annual Expected Returns: 18.2%

Analog Devices makes integrated circuits that are sold to OEMs (original equipment manufacturers) to be incorporated into equipment and systems for communications, computer, instrumentation, industrial, military/aerospace, and consumer electronics applications.

The business is targeting a long term annual revenue growth rate of 7-10% annually, as the company continues to build on its leading markets and benefits from secular trends like Industry 4.0, which is implementing machine learning into factory production, data centers, and augmented and virtual reality.

On August 17th, 2022, Analog Devices reported Q3 2022 results. For the quarter, the company reported revenue of $3.11 billion, up 76.7% compared to the prior year’s quarter, and this beat analysts’ estimates by $50 million.

Most of the steep year-over-year revenue increase is due to the company’s recent $20 billion acquisition of Maxim Integrated to help the company expand its offerings in the automotive and industrial markets.

Adjusted earnings-per-share of $2.52 beat analyst estimates by 9 cents and represented 46.5% growth in earnings-per-share compared to the year-ago quarter.

Click here to download our most recent Sure Analysis report on ADI (preview of page 1 of 3 shown below):

Tech Stock #3: HP Inc. (HPQ)

• 5-Year Annual Expected Returns: 18.5%

HP Inc. has centered its business activities around two main segments: its product portfolio of printers, and its range of so–called personal systems, which includes computers and mobile devices.

In the 2022 fiscal third quarter, HP reported revenue of $14.66 billion, down 4.2% year-over-year. Adjusted earnings-per-share of $1.04 beat by a penny. You can see a breakdown of the company’s quarterly results in the image below:

Source: Investor Presentation

HP enjoys competitive advantages as a leader in its two legacy businesses. The long-term viability of these markets is unknown to some extent, but for now HP owns a $4+ billion annual underlying profit machine. HP could be a major beneficiary of consolidation in the industry, and thanks to its strong balance sheet and ample cash flows, it could easily become an acquirer of competing businesses.

Click here to download our most recent Sure Analysis report on HPQ (preview of page 1 of 3 shown below):

Tech Dividend Stock #2: Qualcomm Inc. (QCOM)

• 5-Year Annual Expected Returns: 20.2%

Qualcomm develops and sells integrated circuits for use in voice and data communications. The chip maker receives royalty payments for its patents used in devices that are on 3G and 4G networks. Qualcomm has a current market capitalization of $158 billion and should generate sales of more than $44 billion this year.

On April 13th, 2022, Qualcomm increased its quarterly dividend 10.3% to $0.75, marking the company’s 20th consecutive year of dividend growth. On July 27th, 2022, Qualcomm announced results for the third quarter of fiscal year 2022 for the period ending June 26th, 2022 (the company’s fiscal year ends September 30th, 2022).

Revenue was higher by 37.3% to $10.9 billion, which was $50 million more than expected. Adjusted earnings-per-share of $2.96 compared very favorably to $1.92 in the previous year and was $0.09 ahead of estimates. Revenues for Qualcomm CDMA Technologies, or QCT, grew 45% to $9.4 billion.

Source: Investor Presentation

Handsets, Internet of Things, RF frontend, and Automotive grew 59%, 31%, 9%, and 38%, respectively. Qualcomm Technology Licensing, or QTL, improved by 2% to $1.5 billion. Qualcomm repurchased four million shares at an average price of $125 during the quarter.

Leadership forecasts adjusted earnings-per-share of $3.00 to $3.30 for the fourth quarter, compared to consensus of $3.25. Based on the midpoint of company guidance, we expect Qualcomm will earn $12.55 in fiscal year 2022, which would be a 47% increase from 2021.

We expect 7% annual EPS growth for Qualcomm over the next five years. We also feel the stock is undervalued, and an expanding P/E multiple could boost annual returns moving forward. The stock also has a dividend yield of 2%, leading to expected returns of 16.4% per year over the next five years for QCOM stock.

Click here to download our most recent Sure Analysis report on QCOM (preview of page 1 of 3 shown below):

Tech Dividend Stock #1: Lam Research Corp. (LRCX)

• 5-Year Annual Expected Returns: 20.2%

Lam Research Corporation designs, manufactures, markets, refurbishes, and services semiconductor processing equipment used to fabricate integrated circuits worldwide. Lam is a major supplier of wafer fabrication equipment and services to the semiconductor industry.

Its products address various applications, including thin film deposition, single–wafer cleaning, and plasma tech.

Lam Research is a shareholder-friendly company that returns significant amounts of cash to investors through share buybacks and dividends.

Source: Investor Presentation

On July 27, 2022, Lam Research reported the fourth quarter and full-year results for Fiscal Year (FY) 2022, ending on June 26, 2022. Quarterly revenue grew by 11.8% to $4.64 billion. On a per-share basis, the company earned $8.74 for the quarter, 9.5% higher than in the fourth quarter of the fiscal year 2021.

For the fiscal year, revenue is up 17.8%, and net income is up 17.8% compared to FY2021. Also, earnings are up 21.7% for the fiscal year compared to FY2021.

Click here to download our most recent Sure Analysis report on Lam Research (preview of page 1 of 3 shown below):

Final Thoughts

The technology sector has become an intriguing place to look for high-quality dividend investment opportunities.

With that said, it is not the only place to look for investment ideas.

If you’re willing to venture outside of the technology sector, the following databases contain some of the most high-quality dividend stocks around:

• The Dividend Aristocrats List: S&P 500 stocks with 25+ years of consecutive dividend increases
• The Dividend Achievers List: Dividend stocks with 10+ years of consecutive dividend increases
• The Dividend Kings List: Dividend stocks with 50+ years of consecutive dividend increases
• The Blue Chip Stocks List: Dividend stocks that qualify as either Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
• The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
• The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
• The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
  Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
• The Dividend Contenders List: 10-24 consecutive years of dividend increases.
• The Dividend Challengers List: 5-9 consecutive years of dividend increases.

If you’re looking for other sector-specific dividend stocks, the following Sure Dividend databases will be useful:

• The Complete List Of Utility Stocks
• The Complete List Of Communication Services Stocks
• The Complete List Of Consumer Staples Stocks
• The Complete List Of Consumer Discretionary Stocks
• The Complete List Of Healthcare Stocks
• The Complete List Of Financial Stocks
• The Complete List Of Real Estate Stocks
• The Complete List Of Energy Stocks
• The Complete List Of Materials Stocks
• The Complete List Of Industrial Stocks