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Technology stocks and dividends? These concepts are antonyms in the investing arena. However, some companies have the unique combination of both shareholder friendly policies that enable the company to return cash to shareholders coupled to an underlying business that can produce consistent cash flows. In turn, those cash flows can be converted from dividends to investors.

This article will analyze five dividend-paying tech stocks to find out if they have the potential to be winners for your portfolio. Specifically, these stocks were chosen because of the size of their dividends and their ability to increase net income in a way that dividends can be maintained or grown. Here is my analysis:

Computer Program & Systems Inc. (CPSI) CPSI has a market cap of $766 million with a price to earnings ratio of 30.64. The stock has traded in a 52 week range between $43.27 and $79.06. The stock is currently trading around $69. The company reported second quarter revenues of $48.8 million compared to revenues of $37.7 million in the second quarter of 2010. Second quarter net income was $7.92 million compared to net income of $4.26 million in the second quarter of 2010.

One of CPSI’s competitors is McKesson Corporation (MCK). MCK is currently trading around $73 with a market cap of $17.98 billion and a price to earnings ratio of 15.88. MCK pays a dividend that yields 1.1%, versus CPSI whose dividend yields 2.2%.

CPSI is an established medical technology company that has made a profit in each of the last ten years. The company has increased earnings in each of the last four years by a total of 44%. The company increased its year-over-year second quarter revenues by 29.4% and its second quarter net income by 85.9%. The company has paid quarterly dividends since 2003, and in 2006 increased its annual dividend to $1.44, which is what it is paying now.

Investors seem to like the company’s history of growing earnings and paying dividends. The stock price has grown by 55.18% over the last 52 weeks and by 235% over the last three years. I believe that the stock is fairly valued at its current price, but would advise investors to consider buying the stock if there are any dips in the stock price. I rate CPSI as a hold.

International Business Machines (IBM) IBM has a market cap of $220.94 billion with a price to earnings ratio of 15.02. The stock has traded in a 52 week range between $136.70 and $186.63. The stock is currently trading near the top of its 52 week range at around $185. The company reported second quarter revenues of $26.7 billion compared to revenues of $23.7 billion in the second quarter of 2010. Second quarter net income was $3.66 billion compared to net income of $3.38 billion in the second quarter of 2010.

One of IBM’s competitors is Accenture Plc (ACN). ACN is currently trading around $57 with a market cap of $36.92 billion and a price to earnings ratio of 16.79. ACN pays a dividend that yields 2.4% versus IBM whose dividend yields 1.6%.

IBM is one of the largest and most successful technology companies in the world. The company has increased its net income in each of the last five years by a total of 86.6%. In addition to offering investors consistent earnings growth, the company has been an excellent dividend paying company. The company has paid quarterly dividends since the early 1960s, and has increased its dividend in each of the last five years, by a total of 375%.

Investors like the progress that IBM has been making and have pushed up the stock price. IBM’s stock price has increased by 32.28% over the last 52 weeks and by 122% over the last three years. IBM investors have benefited from the company’s above average earnings, divided increases and stock appreciation. I think IBM will continue to be a winning stock pick. I rate IBM as a buy.

Quality Systems Inc. (QSII) QSII has a market cap of $2.72 billion with a price to earnings ratio of 39.58. The stock has traded in a 52 week range between $58.35 and $101.40. The stock is currently trading at around $93. The company reported first quarter revenues for the period ending on June 30th of $100 million compared to revenues of $82.9 million in the first quarter of 2010. First quarter net income was $61.6 million compared to net income of $48.4 million in the first quarter of 2010.

One of QSII’s competitors is Allscripts Healthcare Solutions Inc. (MDRX). MDRX is currently trading around $19 with a market cap of $3.57 billion and a price to earnings ratio of 181.06. MDRX pays no dividend versus QSII that pays a dividend that yields 1.6%.

QSII which markets electronic health care systems has done a terrific job of growing earnings. The company has increased net income in each of the last ten years. In the 2011 fiscal year, the company increased revenues by 20.8% and net income by 27.2%. The company has been paying quarterly dividends since 2005, and the current dividend is $1.40 with a yield of 1.6%.

The company’s stock price has benefited from its consistent earnings increases, and is up by 43.91 % over the last 52 weeks, and 157% over the last three years. QSII will benefit from government incentives that reward health care providers for computerizing their medical records. There are still many health care providers that have not computerized their records, and as a result, QSII has a $180 million in backlog business. QSII should continue to realize strong earnings growth and the stock price should continue to rise. I rate QSII as a buy.

Total Systems Services Inc. (TSS) TSS has a market cap of $3.54 billion, with a price to earnings ratio of 18.47. The stock has traded in a 52 week range between $14.97 and $19.36. The stock is currently trading around $18. The company reported second quarter revenues of $448 million compared to revenues of $434 million in the second quarter of 2010. Second quarter net income was $53.1 million compared to net income of $47.3 million in the second quarter of 2010.

TSS has been profitable in each of the last ten years and has increased net income in each of the last four quarters. The company has paid quarterly dividends since 1989 and currently pays a $0.28 dividend with a 1.5% dividend yield. The company’s stock has performed well and is up by 18.71% over the last 52 weeks and 43% over the last three years. The company’s earnings increases have slowed and its year-over-year second quarter revenues increased by only 3%, while net income increased by 12%. TSS is a fine company, but there are other tech companies that offer a greater potential for capital appreciation, and a higher dividend income. I rate TSS as a hold.

Jack Henry Associates Inc. (JKHY) JKHY has a market cap of $2.64 billion with a price to earnings ratio of 19.23. The stock has traded in a 52 week range between $24.41 and $34.17. The stock is currently trading around $31. The company reported second quarter revenues of $249 million compared to revenues of $228 million in the second quarter of 2010. Second quarter net income was $36.6 million compared to net income of $30 million in the second quarter of 2010.

One of JKHY competitors is Fidelity National & Associates Inc. (FIS). FIS is currently trading around $31, with a market cap of $7.86 billion, and a price to earnings ratio of 18.52. FIS pays a dividend that yields 0.8% versus JKHY, whose dividend yields 1.4%.

JKHY provides business services to small and mid-sized banks. The company has been profitable for more than a decade, and increased its 2010 net income by 14%. The company has paid quarterly dividends since 1991 and has increased its dividend in each of the last five years by a total of 72.7%. The stock of JKHY has performed well and is up by 16.53% over the last 52 weeks, and by 88.8% over the last three years. The company offers its investors capital appreciation and an increasing dividend. I rate JKHY as a buy.

Source: 5 Big Dividend Tech Stocks To Consider For Your Portfolio