When thinking of dividends, common sectors of the market that are popular among investors include utilities, finance, or consumer staples.
However, a fair number of technology companies also reward their investors handsomely.
Technology stocks are generally not targeted by income investors, as it’s common for these companies to utilize cash to fuel growth and future opportunities.
However, three large-cap companies – Apple AAPL, Microsoft MSFT, and Texas Instruments TXN – are all examples of technology stocks that provide shareholders with a passive income stream.
Below is a chart illustrating the performance of all three year-to-date, with the S&P 500 blended in as a benchmark.
Zacks Investment Research
Image Source: Zacks Investment Research
For those interested in tapping into technology exposure paired with dividends, let’s take a closer look at each.
Apple
In its latest quarterly release, Apple delivered a positive 5.6% EPS surprise and reported revenue 2% above expectations. In a shareholder-friendly move, the company also announced a 4% increase to its quarterly cash dividend, payable on May 18th.
The dividend increases from Apple have definitely added up over time, and this is paired with the stellar price return that shares have provided.
Zacks Investment Research
Image Source: Zacks Investment Research
Apple is a cash-generating machine, allowing it the flexibility to reward its shareholders consistently. In FY22, the technology titan generated a mighty $111.4 billion in free cash flow, improving nearly 20% year-over-year.
Zacks Investment Research
Image Source: Zacks Investment Research
Microsoft
Microsoft posted quarterly results that impressed the market in its latest release, delivering a 10% EPS beat and reporting revenue nearly 4% above expectations. Below is a chart illustrating the company’s revenue on a quarterly basis.
Zacks Investment Research
Image Source: Zacks Investment Research
The market has been impressed with MSFT’s quarterly releases in 2023 so far, as we can see by the green arrows circled in the chart below.
Zacks Investment Research
Image Source: Zacks Investment Research
The company’s annual dividend presently yields 0.9%, above the Zacks Computer and Technology sector average by a few ticks. Notably, Microsoft has grown its payout by more than 10% over the last five years, fully reflecting its shareholder-friendly nature.
Zacks Investment Research
Image Source: Zacks Investment Research
Texas Instruments
Texas Instruments is an original equipment manufacturer of analog, mixed-signal, and digital signal processing (DSP) integrated circuits.
TXN’s dividend metrics could be the most attractive of all three; TXN’s annual dividend presently yields 3%, more than triple the Zacks sector average. In addition, the company boasts a 15% five-year annualized dividend growth rate.
Zacks Investment Research
Image Source: Zacks Investment Research
Texas Instrument shares are somewhat cheap on a relative basis, with the current 21.9X forward earnings multiple sitting nicely below the 23.2X five-year median and highs of 24.1X last year.
Zacks Investment Research
Image Source: Zacks Investment Research
Bottom Line
Investors shouldn’t forget technology stocks when considering an income-generating portfolio. On top of a passive income stream, market participants receive exposure to the high-flying sector.
And all three companies above – Apple AAPL, Microsoft MSFT, and Texas Instruments TXN – are all examples of dividend-paying technology stocks.
All three have grown their dividend payouts nicely over the years, reflecting a commitment to increasingly rewarding shareholders.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
