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What if you own a company that generates huge income on equity (return on equity) and pays big dividends to shareholders? It could be a unique and profitable cash cow! The return on equity is a profitability measure which shows you the how efficiently the company’s equity is used to generate income. If your high equity return stock is acting within the technology sector, you have an additional chance to participate in the growth of future technologies.

I screened the technology sector by high yield stocks with a return on equity of more than 25 percent. 11 stocks fulfilled these criteria, of which roughly 45 percent came from the wireless communication industry. The others are telecoms or telecom related companies. In addition to these results, which mostly have a payout above the long term income power, I picked up only stocks with a payout ratio of less than 50 percent and a debt to equity ratio of less than 0.2. These are the results sorted by dividend yield:

1. Telecom Argentina (NYSE:TEO) is acting within the diversified communication services industry. The company has a market capitalization of $4.0 billion, generates revenues of $3.9 billion and a net income of $539.7 million. Its P/E ratio is 7.4 and forward price to earnings ratio 6.3, Price/Sales 1.0 and Price/Book ratio 2.6. Dividend Yield: 7.9 percent. The return on equity amounts to 38.6 percent and the total debt to equity ratio is 0.03.

2. USA Mobility (NASDAQ:USMO) is acting within the wireless communication industry. The company has a market capitalization of $309.5 million, generates revenues in an amount of $238.6 million and a net income of $110.2 million. It has a P/E ratio is 2.9 and forward price to earnings ratio is not calculable, Price/Sales 1.3 and Price/Book ratio 1.3. Dividend Yield: 7.1 percent. The return on equity amounts to 53.8 percent and the total debt to equity ratio is 0.12.

3. Telular (NASDAQ:WRLS) is acting within the wireless communication industry. The company has a market capitalization of $90.6 million, generates revenues in an amount of $49.4 million and a net income of $38.4 million. It has a P/E ratio of 2.4 and forward price to earnings ratio 15.0, Price/Sales 1.8 and Price/Book ratio 1.5. Dividend Yield: 6.7 percent. The return on equity amounts to 78.1 percent and the total debt to equity ratio is 0.00.

4. Technical Communications (NASDAQ:TCCO) is acting within the communication equipment industry. The company has a market capitalization of $19.9 million, generates revenues of $16.7 million and a net income of $5.2 million. It has a P/E ratio of 3.0 and forward price to earnings ratio is not calculable, Price/Sales 0.8 and Price/Book ratio 1.0. Dividend Yield: 5.3 percent. The return on equity amounts to 47.6 percent and the total debt to equity ratio is 0.00.

Source: 4 High Yield Technology Stocks With Big Return On Equity And Low Debt