These tech stocks have at least 2% yields and have outperformed in 2021.
While the big rebound after the pandemic-era lows of last year seemed nigh unstoppable in 2020, it now appears that the stock market could be running into some troubles as we enter the fourth quarter. From anemic jobs numbers recently to inflation concerns and growing talk of a government shutdown, it’s not surprising that the S&P 500 is down from its September all-time highs. But the long-term outperformance of tech stocks coupled with the fact that many of these high-flying names also offer above-average dividends should provide a bit of stability for investors who aren’t afraid of any near-term volatility. Here are seven top tech dividend stocks to buy with yields of 2% or better at present.
ASE Technology Holding Co. Ltd. (ASX)
A roughly $19 billion Taiwan-based semiconductor stock, ASE Technology is engaged primarily in “packaging and testing” services rather than designing its own proprietary chips. There are smaller margins in this kind of business, true, but there’s also a high degree of certainty as other semiconductor companies contract services out to ASE. Admittedly, the company hit a rough spot after eliminating its dividend in 2019 and suffering through pandemic-related supply disruptions in 2020. But shares have raced up more than 40% year to date to eclipse their 2015 highs after the recent reinstatement of its dividend and on hopes for continued success in 2022.
Forward dividend yield: 3.5%
Cisco Systems Inc. (CSCO)
One of the first companies from the old guard of tech stocks to begin paying substantial dividends to shareholders, Cisco has paid a dividend since 2011 and that quarterly payout has surged from 6 cents to 37 cents a share presently — a more than six-fold increase in 10 years, despite a global pandemic and major disruptions to enterprise tech over the last decade. And lest you think Cisco is too antiquated to be profitable, CSCO stock has surged more than 40% in the last year to outperform the S&P 500 as well as deliver its steady income to shareholders.
Dividend yield: 2.7%
Hewlett Packard Enterprise Co. (HPE)
Most investors probably recognize the Hewlett Packard brand from laptops or Inkjet printers of yesteryear. However, after a 2014 restructuring, HP Inc. (HPQ) took over this consumer-facing line of products and left while HPE remained as a data infrastructure and enterprise technology services stock. It’s this second company that dividend investors should be interested in, because this side of the business isn’t worried about consumer spending trends or the death of printers and copiers in a digital age. Instead, it inks long-term service contracts with businesses — and while business isn’t necessarily booming, both earnings and sales are set to increase both this fiscal year and in FY2022. What’s more, with projected earnings per share of almost $2 next year but dividends only at 48 cents annually, there is ample headroom for increases even if those optimistic targets fall a bit short.
Dividend yield: 3.7%
McAfee Corp. (MCFE)
Perhaps one of the most generous tech dividend stocks lately, online security firm McAfee declared a special dividend of $4.50 in August, a massive payday on top of its ongoing 11.5-cent quarterly distribution. And by the way, that dividend is up from 8.7 cents at the end of 2020. Admittedly, the company doesn’t have much history after a recent spinoff from chipmaker Intel Corp. (INTC). And since the special dividend was a one-time generosity, shares have pulled back a tad now that payment is in the rearview. But shares are still up more than 50% year to date to make MCFE one of the best-performing tech stocks of any stripe, and it’s annualized dividend is still more than 2% even when you ignore August’s payday.
Dividend yield: 2.1%
NetApp Inc. (NTAP)
With a boost in July that now gives NetApp a 50-cent quarterly dividend, this tech stock has seen an impressive growth rate of about 163% in its payouts when compared with just 19 cents in early 2017. Part of NTAP’s recent success is admittedly driven by pandemic-related disruptions that have played into its business. After all, this company is a big player in cloud services to manage and share data on-premises, including remote desktop access as well as backup and compliance services. But with projected earnings growth of 23% this fiscal year, things are hardly slowing down — and that generous dividend is more than sustainable for years to come.
Dividend yield: 2.2%
Seagate Technology Holdings PLC (STX)
Seagate has long been on the radar of dividend stock investors, despite the fact that it’s admittedly involved in a rather old school corner of the tech sector — namely, hard drives used in servers and laptops and the like for local data storage. While the vast majority of businesses and even many consumers have migrated to cloud-based data solutions, the fact remains that hardware is very much still a thing in 2021. And for proof, just consider that STX revenue is up modestly in each of the last two fiscal years despite pandemic-related challenges and supply chain disruptions. Earnings are also grinding higher, comfortably supporting a dividend that’s above most S&P 500 stocks — tech companies or otherwise.
Dividend yield: 3.2%
United Microelectronics Corp. (UMC)
UMC is a roughly $29 billion Taiwan-based microchip manufacturer that has been able to command premium prices lately for its services, thanks to continued supply chain disruptions and the related global chip shortage. In a nutshell, United Microelectronics is a vital stopgap for many companies as it sees larger orders to create high tech components as quickly as possible amid surging demand. Recent big-ticket investments to upgrade its production capacity have paid off, but haven’t gotten in the way of a generous payout on top of its impressive 170% run in the last 12 months.
Dividend yield: 2.4%
Seven of the best dividend-paying tech stocks to buy:
— ASE Technology Holding Co. Ltd. (ASX)
— Cisco Systems Inc. (CSCO)
— Hewlett Packard Enterprise Co. (HPE)
— McAfee Corp. (MCFE)
— NetApp Inc. (NTAP)
— Seagate Technology Holdings PLC (STX)
— United Microelectronics Corp. (UMC)
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