Entering text into the input field will update the search result below

Top 10 Power Ranking Divvy Techs

Apr. 10, 2018 12:06 AM ETADI, AVGO, INTC, OTEX, V, MSFT, AAPL, CSCO, MA, TXN, IBM, OTEX:CA41 Comments
The Dividend Guy profile picture
The Dividend Guy


  • Tech stocks usually don’t show an impressive dividend profile on the market.
  • But some of them deserve a mention and a place in your portfolio.
  • Here’s my top 10 of stocks that combine both growth and dividend growth.

With Facebook (FB) and Amazon (AMZN) getting hit from right left and center these days, investors pretty much keep their focus on the FAANG. When we think of tech stocks, we often imagine a bunch of geeks typing on their computer with 3 screens in front of them. We also imagine young, hip and fast-moving companies with great potential to bring triple-digit returns in our portfolio.

But what about the “older guys” that went through years of great returns and have now decided to pay dividend? Most old techs have several things in common:

  • They have built a business model that is profitable and shows it can go through a storm;
  • They are cash rich;
  • They started to share the wealth with shareholders;
  • They have a double-digit dividend growth potential for the next decade.

Do you want to turn down those companies? I certainly don’t want to. As I focus on dividend growth to build my portfolio, the technology sector is among my favorite to build the core of my nest egg. Here are my top 10 divvy techs with three reasons to hold them. My top 5 show a great combination of solid business model (e.g., strong cash flow generation) along with solid growth vectors for the coming decades. All companies show a double-digit dividend growth potential too. You can’t ignore nerd stocks anymore!

(Image credit)

10) Broadcom (AVGO)

Broadcom is making the last spot of my power ranking mainly due to its failed attempt to purchase Qualcomm (QCOM). Broadcom is a giant in the semiconductor industry. It operates four segments: wired infrastructure, wireless communications, enterprise storage and industrial & others. Besides the acquisition drama, AVGO has posted a solid first quarter.

First, the company’s FBAR (film bulk acoustic resonator filters) is among the best filters for frequencies above 2

This article was written by

The Dividend Guy profile picture
My name is Mike and I’m the author of The Dividend Guy Blog & The Dividend Monk along with the owner and portfolio manager here at Dividend Stocks Rock (DSR). I earned my bachelor degree in finance-marketing, own a CFP title along with an MBA in financial services. Besides being a passionate investor, I’m also happily married with three beautiful children. I started my online venture to educate people about investing and to be able to spend more time with my family. I started my career in the financial industry back in 2003. I earned several promotions along with a good pile of diplomas. I had lots of fun working with clients in private banking for half a decade, but thought I could do more with my life. In 2016, I decided to take a leap of faith and left everything behind to travel across North America and Central America with my family. We drove through nine countries and stayed three months in Costa Rica before returning home. This was an eye-opening adventure that led me in 2017 to quit my job in the financial industry and pursue my dream; helping others with their personal finance through my investing websites. You just found the reason why I quit my suit & tie job!

Analyst’s Disclosure: I am/we are long ADI, INTC, V, AAPL, TXN, CSCO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The opinions and the strategies of the author are not intended to ever be a recommendation to buy or sell a security. The strategy the author uses has worked for him, and it is for you to decide if it could benefit your financial future. Please remember to do your own research and know your risk tolerance.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (41)

The only stock on your list that looks like a good buy to me is Broadcom.
snaimpally profile picture
Thanks for the article. Great list, including the omission of IBM. I would add QCOM.
Clauser1960 profile picture
Good stocks, I would add Qcom because it is undervalued and it will receive millions from Apple.
Long AAPL, MSFT, CSCO, TXN, QCOM, and INTC in tech.
Daniel.Cluley profile picture
Dividend Guy, do you consider ADP tech? It's another one of those 'grey area' sector stocks. If considered 'tech' I would definitely add to the list as well.
The Dividend Guy profile picture
I like ADP as well, but I was registered under the industrial sector.
I don't understand how you have Microsoft #1 when they only pay 1.85%, have had operating income going down since 2015, and have a payout ratio over 100%. A company's stock should be priced on earnings. Microsoft does not justify this valuation.
Apple also has less operating income since 2015, pays only a small dividend, but it's a lot cheaper stock so it could see more upside than Microsoft.
So if I were deciding which one to buy here it would be Apple and I would make it #1.
Scootrd profile picture
MSFT Payout ratio as of close of business 4/10/18 is 46.3%, Not sure what data led you to believe a payout ratio over 100%.
The Dividend Guy profile picture
@Momintn, You can't just pick raw numbers from websites. You have to dig deeper in the company's financial statements (especially when you look at payout ratio which is directly to earnings). Here's more explanation on the latest quarter:
· GAAP diluted loss per share was $(0.82) and non-GAAP diluted earnings per share was $0.96
· GAAP results include a $13.8 billion net charge related to the Tax Cuts and Jobs Act (TCJA)

With a quarterly dividend of $0.42, the payout ratio is not 100%, but 46.3% as @Sootrd mentioned.


Your take on ADI was instructive. Sold some puts recently on it for an attractive premium, and won't care if the price falls into the buy range with that dividend. Best wishes.
Long V and AAPL here ;)
Agree on AAPL and MSFT as top choices. Also like LRCX (recent commitment to returning 50% of FCF to shareholders), CY (good but static div), AMT & EQIX (cell and colocation data center REITs).

I'm wary of DGI stocks with slow growth and inflated valuations...TXN, CSCO, INTC, and especially 3M all fit here. Also steer clear of AVGO and QCOM which are both very messy
...actually, I might be coming around to CSCO after reading up on them a little more today
Dividend Guy - I won't argue about your list or even with the rankings. But I thought it was funny that the main reason that Apple is not your #1 is because of the potential trade war with China. First, it's only a "potential" trade war. There is no trade war today. Only a lot of aggressive posturing and rhetoric. Secondly, even if there is some disruption to the trade between the two nations, we don't know how it might directly or indirectly effect any of the companies on your list and will probably only be a transient event in any case if you're looking out over 10 years.

Microsoft has done a fabulous job reshaping their business. But I think their share price is probably more vulnerable during a broader market correction given the valuation of the business (>7x Revs and 33x 2017 earnings). I keep Apple on top of the list simply because they are, as you described, an amazing business.
The Dividend Guy profile picture
I have both in my personal portfolio (and AAPL is my largest holding...). If I update this ranking in 6 months, AAPL may as well get in 1st place! haha!
Div Guy - "...and AAPL is my largest holding..."

Ahhh. So when it's your keyboard talking, MSFT is #1. But when it's your money talking, it's AAPL.

That speaks for itself. ☺️
The Dividend Guy profile picture
It depends on how you see it. If I have to put an additional dollar on a company TODAY, I would put it on MSFT.
I am surprised that QCOM was not even mentioned... Seems odd to me.
I do own 4 companies from the list.
Good investing
The Dividend Guy profile picture
QCOM remains solid. But all the saga around it ($AVGO deal and $AAPL lawsuit) makes it a risky bet for now. Still, smartphone makers need $QCOM technology...
DIv Guy

QCOM financial situation is superior to half the companies you mentioned...Balance sheet, Cash Flow generation etc...Despite the the Apple saga!
I would surely put it on the top of that list.
Btw, a list of your top 10 international Divvy Tech companies would be very interesting as well...
Good investing.
Div-Lust profile picture
Nice article. Would you consider GLW a good tech divvy payer?
Like MMM, GLW is more of a "high tech" industrial company, I own both for the long term...
Good investing.
Kyle Fishman profile picture
How do you feel about INTC?
The Dividend Guy profile picture
It was a good buy a few months ago, still not too bad now that it has dropped a little :-).
Evil Enantiomer profile picture
LRCX is another company that has been raising their dividend, although they are still young. What’s the saying... don’t buy the gold rush companies, buy the companies that supply them.
WSLegend profile picture
“Dividend” Guy, no mention of the dividends for any of these CO’s?
The Dividend Guy profile picture
Fair point, I didn't write a full profile for each of them as my article was already close to 3,000 words. However, I've covered most of them over the past few months (either on Seeking Alpha or on within my Market Place service).
BeatingTheJoneses profile picture
CY is a great one. Growth now fueled by their USB-C charging and great penetration in autonomous driving and IoT. Potential acquisition target.
Daniel.Cluley profile picture
I agree with most. Also check out XLNX. Long MSFT, TXN, ADI, IBM, and V.
The Dividend Guy profile picture
XLNX has come as a suggestion from many readers, I'll definitely take a look!
Qniform profile picture
Ditto XLNX, but valuation is an issue as it is for all of the list except OTEX.

Of the author's 10, if growth is an added objective OTEX is the pick. Trees don't grow to the sky and OTEX is under $10B cap.
Mili21 profile picture
Other than Microsoft no one has tasted at least one recession while on dividend plan.
It will remain to be seen how these tech giants will survive/increase their dividend growth through next recession, if anything strikes in next couple of years.
The Dividend Guy profile picture
You bring a very good point. It will be interesting to see how those companies manage their dividend policy while they run into a few speed bumps. I think they will be fine as most of them are sitting on lots of cash.
10 Apr. 2018
interesting point, but eg. TXN has been growing for solid 50+ years, just did not pay a dividend before.
Mili21 profile picture
Also will be an interesting scenario for few of the tech companies with M&A / disruption / competition / cyber - data security threats.
Look at QCOM which was takeover target by AVGO.
If companies like AVG take over QCOM, the combined entity will not be paying half the dividend that QCOM pays.
HP was a big name just few years back now divided in two or more entities. YHOO is merged with VZ. FB is dealing with data privacy issues.
Any of the above scenarios may jeopardize the credibility of the company as well as the reason for suspension / termination of their dividends.
crrj profile picture
Has anyone else read that Bank America has more block-chain patents than anyone else???
BeatingTheJoneses profile picture
Yeah but it is Bank of America, they don’t execute very well except poorly timed acquisitions. JPM will be the forerunner in blockchain for the financial sector. Zelle is the brainchild behind Chase’s Quickpay that they got the other banks to join in. Do not expect blockchain for the financial sector to be a game changer but more of a money saver. ACH and wiring are really outdated methods which require many hands to touch. In regards to merchant processing Visa will be the forerunner. Visa and JPM are extremely close since Ryan McInerney (Visa’s President) was an executive at Chase. Shortly after Ryan went to Visa, Chase announced they will exclusively use Visa.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.