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8 Tech Stocks to Buy Offering Solid Dividends

Investor Place · 09/01/2021 08:53

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Tech income is a relatively new concept when it comes to big tech and investing in tech stocks more broadly. There are some companies here with long pedigrees that have been delivering dividends for decades. But the tech boom in the past three decades has given us a number of more mature tech firms with big market caps that are past their massive “Big Bang” expansion.

That’s how many of these early tech firms started — from something tiny to massive in the relative blink of an eye. And now they continue to expand, but it’s more about the reliability of their expansion than the speed of it.

Now it’s about their tech income stocks’ gravitational pull and the planets that now orbit their universes. And of course on a more fundamental level, it’s about shareholder value. Once these companies establish their foothold, they want to make sure their investors are compensated regardless of markets’ ebbs and flows.

  • Broadcom (NASDAQ:AVGO)
  • Amdocs (NASDAQ:DOX)
  • General Dynamics (NYSE:GD)
  • HP (NYSE:HP)
  • L3Harris Technologies (NYSE:LHX)
  • Seagate Technology (NASDAQ:STX)
  • Texas Instruments (NASDAQ:TXN)
  • Analog Devices (NASDAQ:ADI)

Tech Income Stocks: Broadcom (AVGO)

broadcom (AVGO) logo outside office building
Source: Sasima / Shutterstock.com

Given its nearly $200 billion market cap and the fact that it has been a leading chipmaker since 1961, AVGO is certainly a chipmaking blue blood that continues to hit the top five semiconductor stocks in the world.

It also makes interfaces for Bluetooth devices, fiber optics, analog devices and other tech that makes our digital world work together. Remember, analog chips allow analog signals (like voice) to be digitized. Think about how many devices you can talk to these days. AVGO is there.

Today, we have a serious chip shortage due to production delays during the pandemic and chip prices are rising due to demand. AVGO stock is up 17% year-to-date, but this will continue to improve.

It’s also a tech income leader. No paltry dividend here — it delivers a near-3% dividend yield.

The stock has a B-rating in Dividend Grader.

Amdocs (DOX)

a man taps a digital image of a cloud with his finger
Source: Shutterstock

Originally an Israeli company, it’s now headquartered in the U.S. This likely isn’t as recognizable among most individual investors because it’s a cloud-based digital services provider that creates unified solutions among service providers and content providers for better digital experiences for their customers.

For example, if you’re a content provider and you work with a digital streaming service, DOX creates the platforms that allow the streaming service to manage its interactions with the content providers while also creating an easy interface for customers.

It’s a key piece of both cable and streaming service providers as well as telecom providers. And DOX’s list of clients is a who’s who of the entertainment and telecom industry.

DOX has a market cap around $10 billion and has been in the business for nearly three decades. It’s now coming into its own and it’s a great tech income stock still flying under most investors’ radar. It has a nearly 2% dividend and has risen 11% year-to-date.

The stock has an A-rating in Dividend Grader.

Tech Income Stocks: General Dynamics (GD)

image of General Dynamics (GD) website, representing dividend stocks
Source: Casimiro PT / Shutterstock.com

No, this isn’t a typo. And yes, GD is a well-recognized top tier defense contractor. Why is it on this list?

The networked battlefield.

What many investors don’t realize is that the armed forces are on the vanguard of tech solutions. And once the military determined that automation and a networked theater of operations was the future of combat, deterrence and reconnaissance, it started working on solutions. That was a couple decades ago.

Now we civilians have these devices, like drones, night vision, virtual personal networks and beyond.

GD is one of the leaders in this new tech, especially developing secure cloud-based comms systems and robotics. It’s also a big player in aerospace technologies as the Space Command develops.

Defense stocks have always been reliable income stocks, and now that they’re entering the tech income camp, that hasn’t changed. GD has a 2.4% dividend and is gaining like a tech stock, up 37% year-to-date.

The stock has an A-rating in Dividend Grader.

HP (HPQ)

HP (HPQ) sign with blue sky and autumn leaves as backdrop
Source: Shutterstock

This tech firm has been around so long it’s listed on the NYSE. The company’s roots go all the way back to 1939, and it was the original “garage tech firm” when Bill Hewitt and Dave Packard launched personal computing and Silicon Valley.

Granted some of HP’s next-gen competitors have lapped the company more than once over the decades, but it’s still a reliable and respected industry player. It may not shine as brightly as it once did, but it still has a $35 billion market cap and is a tech presence.

It reported Q3 earnings on Aug. 27 and beat expectations. But it also warned of supply chain challenges for upcoming quarters, which isn’t a surprise. HPQ stock has returned 23% year to date and has a rock-solid 2.7% dividend.

The stock has an A-rating in Dividend Grader.

Tech Income Stocks: L3Harris Technologies (LHX)

L3Harris (LHX) sign outside
Source: Jonathan Weiss / Shutterstock.com

Land, air or space, LHX has been the premier comms provider for the U.S. military, aerospace and intelligence communities for decades. And its relatively recent merger with L3 further solidified that position. It’s also a growing tech income stock like GD.

LHX makes everything from walkie-talkies that operate on secure channels for special forces to communications for government and public aerospace organizations. It’s like GD, but it’s even more focused on telecommunications for operational flexibility and security, including a lot of top-secret C5ISR (Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, Reconnaissance) work.

The company has been around for quite some time now, so it has the recognition and reputation for cutting edge work that has been battle tested time and again. That’s crucial for its biggest clients.

LHX stock is up 29% year-to-date and it has a reliable 1.7% dividend. Both have growth potential. And its prospects as space becomes a new operating theater, are bright.

The stock has a B-rating in Dividend Grader.

Seagate Technology (STX)

A Seagate Technology (STX) sign hanging above an office in Silicon Valley, California.
Source: Sundry Photography / Shutterstock.com

During the pre-dotcom days of computing technology, the hard drive and floppy drive makers were dominant players since everything was dependent upon memory. Copies of software were on disks. And in the very early days, there wasn’t enough hard drive capacity to run a program without the floppy disk being installed.

And in 1984, Seagate was the largest maker of hard disk drives in the world.

It’s wild to think those “Stone Age” days were less than 40 years ago. Now, disk drives are about as crucial as our appendix. Everything is now cloud based. STX was one of the major memory makers back in the day, but then spent years in the wilderness as memory lost out to processing power.

But memory is back in a new, big way. Video, pictures, podcasts, streaming downloads and so much more. STX reformed in Ireland in 2012 for tax purposes and better global operations hub. It’s now a major player in the new wave of memory chips, solid state disc drives and other controllers and subsystems. And its combination of newfound popularity with its mature tech income approach is compelling.

STX has gained 45% year-to-date yet it still has an appealing 3.1% dividend.

The stock has a B-rating in Dividend Grader.

Tech Income Stocks: Texas Instruments (TXN)

Texas Instruments (TXN) logo on its world headquarters located in Dallas, Texas.
Source: Katherine Welles / Shutterstock.com

When you hear about chipmakers these days, somehow TXN is usually not in the story. But the company has been a major player in the tech industry since WWII. It was a major player in building the wiring on U.S. war planes. It then transitioned into the space program.

TXN built the first silicon transistor in 1954. And it was using transistors for radios and other devices as soon as they were developed. It actually built the first commercially available transistor radio in 1954. TXN built and sold it alone because other big radio manufacturers were scared to touch it.

That kind of attitude remains at TXN. And it remains a leader in analog-to-digital chips, which continue to grow in demand, especially as AI and ML-driven devices become more widely available. But its chipmaking just begins there; it hardly ends there.

This quiet giant has a market cap of $173 billion and has its chips in nearly every electronic device around. It doesn’t make the flashy thoroughbred processors or memories. It makes the workhorses that are required to keep devices running smoothly.

TXN is a tech income stalwart and has a 2.1% dividend even after the stock has risen almost 17% year-to-date. Once supply chain issues for chips are alleviated TXN will take off.

The stock has an A-rating in Dividend Grader.

Analog Devices (ADI)

Analog Devices (ADI) sign outside of building
Source: jejim / Shutterstock.com

We hear a lot of talk about chipmakers. But chips are like an engine. They possess certain qualities, but until those qualities are enhanced with say, a transmission, body and wheels, you only have potential, not a product.

ADI builds integrated circuits (ICs). Its customers are companies that want powerful customer solutions, like healthcare firms, factory automation systems, energy management systems or networking systems.

ADI has been doing this work since 1965, so it has quite an impressive client list of global companies. What’s more, it’s very close to the chipmakers since ADI’s work makes their work shine.

The current chip shortage makes it hard for the whole value chain, but ADI has sat idle. And that’s the nice thing about tech income stocks’ income — you are still getting paid to own the stock while we wait.

ADI has a 1.6% dividend and its stock has risen 11% year-to-date. This stock is set to peel out when supply chain issues clear up.

The stock has a B-rating in Dividend Grader.

On the date of publication, Louis Navellier has positions in AVGO, STX and TXN in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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