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When a company raises its dividend while its payout ratio (i.e. dividend/earnings) falls, it's an especially good sign because it implies that earnings are rising and dividends are being raised without any compromise to dividend sustainability.

We ran a screen on stocks exhibiting these trends, with increases in dividend per share year-over-year and decreases in payout ratio, comparing the trailing-12-month ratio to the company’s three-year average. We screened these stocks for those from the tech sector.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬




We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.



List sorted by dividend yield.

1. Rockwell Automation Inc. (NYSE:ROK): Provides industrial automation power, control, and information solutions. Market cap of $8.49B. Dividend yield at 5.25%, payout ratio at 33.79%. Current year dividend per share estimate at $1.44 vs. TTM dividend per share at $1.22. TTM payout ratio at 33.79% vs. 3-year average at 42.79%. The stock has gained 7.34% over the last year.

2. Intel Corporation (NASDAQ:INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap of $105.44B. Dividend yield at 3.62%, payout ratio at 29.97%. Current year dividend per share estimate at $0.77 vs. TTM dividend per share at $0.63. TTM payout ratio at 29.97% vs. 3-year average at 42.78%. The stock has gained 16% over the last year.

3. Analog Devices Inc. (NASDAQ:ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap of $9.80B. Dividend yield at 3.06%, payout ratio at 30.19%. Current year dividend per share estimate at $0.92 vs. TTM dividend per share at $0.84. TTM payout ratio at 30.19% vs. 3-year average at 44.45%. The stock has gained 16.52% over the last year.

4. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. Market cap of $14.61B. Dividend yield at 2.89%, payout ratio at 20.43%. Current year dividend per share estimate at $0.29 vs. TTM dividend per share at $0.27. TTM payout ratio at 20.43% vs. 3-year average at 52.95%. Might be undervalued at current levels, with a PEG ratio at 0.78, and P/FCF ratio at 8.61. The stock has gained 7.25% over the last year.

5. KLA-Tencor Corporation (NASDAQ:KLAC): Engages in the design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. Market cap of $5.98B. Dividend yield at 2.80%, payout ratio at 21.07%. Current year dividend per share estimate at $1.21 vs. TTM dividend per share at $1.00. TTM payout ratio at 21.07% vs. 3-year average at 123.74%. Might be undervalued at current levels, with a PEG ratio at 0.81, and P/FCF ratio at 9.88. The stock has gained 27.88% over the last year.

6. Xilinx Inc. (NASDAQ:XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. Market cap of $8.07B. Dividend yield at 2.50%, payout ratio at 27.54%. Current year dividend per share estimate at $0.75 vs. TTM dividend per share at $0.64. TTM payout ratio at 27.54% vs. 3-year average at 36.17%. Might be undervalued at current levels, with a PEG ratio at 0.94, and P/FCF ratio at 13.01. The stock has gained 23.88% over the last year.

7. Cooper Industries plc (CBE): Manufactures and sells electrical products in the United States and internationally. Market cap of $7.77B. Dividend yield at 2.47%, payout ratio at 30.62%. Current year dividend per share estimate at $1.20 vs. TTM dividend per share at $1.08. TTM payout ratio at 30.62% vs. 3-year average at 36.13%. The stock has gained 8.36% over the last year.

8. MTS Systems Corp. (NASDAQ:MTSC): Supplies test systems and industrial position sensors in the Americas, Europe, and Asia. Market cap of $544.22M. Dividend yield at 2.31%, payout ratio at 25.96%. Current year dividend per share estimate at $0.80 vs. TTM dividend per share at $0.60. TTM payout ratio at 25.96% vs. 3-year average at 35.71%. The stock has gained 24.39% over the last year.

9. Texas Instruments Inc. (NASDAQ:TXN): Engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. Market cap of $29.91B. Dividend yield at 2.01%, payout ratio at 19.21%. Current year dividend per share estimate at $0.52 vs. TTM dividend per share at $0.49. TTM payout ratio at 19.21% vs. 3-year average at 25.94%. The stock has gained 11.12% over the last year.

Dividend and payout data sourced from Screener.co, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 9 Tech Stocks With Rising Dividends, Falling Payout Ratios