The stock market is trading at all-time highs as investors are increasingly optimistic about the economic recovery and coronavirus case counts in the most hard-hit states seem to be under control. Tech stocks have been the primary drivers of this bull market.
Over the last three months, the Technology Select Sector SPDR ETF (XLK) is up 30%. However, this outperformance is raising concerns of overvaluation. Overvalued stocks tend to underperform especially if revenue growth misses expectations. Investors should consider tech stocks that pay dividends that will offer a cushion in the case of a market correction.
Here are the five tech stocks that stand out for their exceptional fundamentals and reliable dividend history: Apple Inc. (AAPL), Microsoft Corporation (MSFT), QUALCOMM Incorporated (QCOM), Oracle Corporation (ORCL), and Texas Instruments Incorporated (TXN).
Apple Inc. (AAPL)
AAPL has been uniformly paying dividends every quarter for the past few years. Over the last 5 years, the average dividend per share growth for AAPL was 10.7% per year. The company has also been consistently increasing its dividend payout after its second-quarter each year. The most recent dividend declared by AAPL was $0.82 per share for its quarter ended June 2020, which translates into a forward annual dividend yield of 0.65%.
AAPL generated a free cash flow of $14.7 billion in its last reported quarter, registering a 53% growth from its comparable quarter last year. The company also generated $16.3 billion in cash flow from operating activities during the quarter, accounting for a 40% increase year-over-year. Moreover, AAPL is producing more trailing twelve-month cash flow than 98.3% of US dividend stocks in the StockNews.com universe.
AAPL’s top-line for its fiscal third quarter ended June was $59.7 billion, up 11% from the year-ago quarter. International sales formed more than 54% of total revenue. The company generated $26 billion in phone sales in the June quarter alone. The pandemic also acted as a catalyst to drive up sales of MacBook and iPad, contributing $13.6 billion in June quarter sales.
AAPL reported an earnings surprise of 26.5% in the last reported quarter, with an EPS of $2.58. The EPS is expected to grow at 19.5% next year.
AAPL has recently been all over the news for becoming the first company to cross the $2-trillion market capitalization mark. It closed yesterday’s trading session at $500.04. The stock is already up 150% from its 52-week low of $199.15. It gained more than 70% year-to-date.
How does AAPL stack up for POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
A for Peer Grade
A for Industry Rank
A for Overall POWR Rating.
You can’t ask for better. It is ranked #1 out of 28 stocks in the Technology – Hardware industry.
Microsoft Corporation (MSFT)
MSFT has been consistently paying dividends every quarter since 2003. Over the last 10 years, the average dividend per share growth for MSFT was 14.3% per year. The company has also been constantly increasing its dividend payout amount during the first quarter each year. The most recent dividend declared by MSFT was $0.51 per share for its fourth quarter ended June. MSFT pays an annual dividend of $2.04 which yields 0.9%.
Free cash flow for the company increased 15.5% year-over-year to $13.93 billion in the last reported quarter. The company also generated $18.67 billion in cash flow from operations, a 16% improvement year-over-year. Additionally, over the past six years, the company has issued more dividends than 98.4% of other dividend-issuing US stocks in the StockNews.com universe.
The top-line for the quarter grew 13% year-over-year to $38 billion. The Intelligent Cloud segment revenue witnessed a 17% increase year-over-year primarily driven by server products and cloud services amid the pandemic. The EPS for the quarter came in at $1.78, increasing 15% year-over-year. Moreover, EPS is expected to grow by 13.6% next year.
MSFT is on a strategic expansion spree. It has recently announced a partnership with…
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