4 High Yielding Tech Stocks to Buy
Mark is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
After years of weak stock returns and strong cash flow generation, tech stocks have become the new high yielding asset class. In the old days, tech stocks didn’t even pay dividends, but now investors can find a solid selection of high yielding tech stocks. Even the great Apple now provides a dividend yield in excess of 2%.
The following high yielding tech stocks all provide yields in excess of 4% and include a range from the mega-cap Intel (NASDAQ: INTC) to the mid-cap Cypress Semiconductor (NASDAQ: CY). These stocks still trade more volatile than a traditional high yielding utility or healthcare stock, but in most cases the stocks provide more growth opportunities than other counterparts in more conservative sectors.
While investors are concerned that Intel missed the transition to tablets, the stock continues to produce a huge 4.2% yield. The well-known producer of computer chips for PCs has a market cap of over $105 billion and annual revenue sales approaching $54 billion. Investors shouldn’t expect large capital gains, but the dividend should remain solid with $18 billion of cash on the balance sheet.
Volatile storage large cap
Seagate Technology (NASDAQ: STX) provides the unique opportunity to invest in a large cap storage play that has bought back a substantial amount of stock within the last 12 months. On top of that, the company provides a substantial 4.5% dividend yield at the current price.
The company designs, manufacturers, and sells hard disk drives for enterprise storage applications worldwide. The products are used in enterprise servers, mainframes, and desktop computers. Investors remain concerned that flash storage devices are replacing hard disk drives, but the company has the cash flow to suggest otherwise.
Underfollowed large cap
CA Technologies (NASDAQ: CA) provides the unique investment in a technology firm likely underfollowed by the market. The company has a dividend yield of 4%, yet the market mostly ignores the stock. The analyst list is half the amount of Seagate yet the company has a similar market cap.
The company provides IT management solutions that help customers manage and secure complex IT environments to support agile business services.
Aggressive speculative play
Cypress Semiconductor with a market cap of only $1.4 billion is by far the smallest and most speculative dividend play on the list. The marketer of chips used in smartphones and tablets has a revenue base of around $800 million, yet has a high dividend yield at 4.3%.
The company delivers high-performance, mixed-signal, programmable solutions that provide customers with rapid time-to-market and exceptional systems value such as the CapSense touch sensing and TrueTouch solutions for touchscreens.
1-Year dividend yield chart
The below chart highlights the dividend yields of these four tech stocks. The yields have soared over the last year as strong cash flows continue to lead to higher yields.
Investors now have the unique opportunity to invest in quality technology stocks with solid dividend yields above 4%. Naturally the stocks will never trade with the low volatility of a utility stock, but these stocks also offer the ability for capital appreciation if the market continues to jump higher.
Mark Holder and Stone Fox Capital Advisors, LLC have no positions in any stocks mentioned. The Motley Fool recommends Cypress Semiconductor and Intel. The Motley Fool owns shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!