Because the stock market is expected to remain in a correction mode, or at least volatile, in the near term due to investors’ concerns about the spread of the COVID-19 Delta variant and high inflation, investing in dividend-paying stocks could help investors ensure a steady income stream. However, not every dividend-paying stock is necessarily a good bet now.
Because the prospects of the technology industry look promising thanks to the continuing global, digital transformation across industries and rising demand for advanced technologies, the chances that mega players in the industry will stay afloat amid the market volatility are very high. So, it could be wise to invest now on the price dips in dividend-paying mega tech stocks Microsoft Corporation (MSFT – Get Rating), Cisco Systems, Inc. (CSCO – Get Rating), Intel Corporation (INTC – Get Rating), and Broadcom Inc. (AVGO – Get Rating).
Their consistent product innovations, combined with expanded market reach, better financials, and attractive dividend yields should enable them to dodge market volatility and deliver significant returns in the coming months.
MSFT develops, supports, licenses, and sells various software products, services and solutions worldwide. The company also manufactures and sells PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories through OEMs, distributors, resellers, digital marketplaces, and retail stores.
MSFT is scheduled to pay a $0.56 quarterly dividend on September 9, 2021. The stock pays a $2.24 dividend per share annually, which translates to an 0.81% yield. The company’s dividend has grown at a 9.5% rate over the past five years.
On July 13, 2021, MSFT and NEC Corporation (NEC), a Japanese information technology and electronics corporation, expanded their collaboration to leverage MSFT’s Microsoft Azure and Microsoft 365, and NEC’s network and IT expertise to help enterprise customers and the public sector further accelerate their cloud adoption and digital transformation initiatives. Combining AI and IoT technologies and the expertise of both companies should enable them to provide greater speed and lower-latency data connections and provide high-performance network experiences to their customers.
On June 30, AT&T Inc. (T) collaborated with MSFT to manage T’s mobile network traffic using MSFT’s Microsoft Azure technology. This should enable T to enhance productivity and deliver large-scale network services to meet customers’ needs. Also, MSFT will have access to T’s intellectual property to expand its Azure for Operators telecom offering and acquire T’s carrier-grade Network Cloud platform. MSFT’s adjusted revenue came in at $41.71 billion for its fiscal third quarter, which ended March 31, 2021, representing a 19.1% year-over-year rise. The company’s gross profit increased 19.2% year-over-year to $28.66 billion. Its adjusted operating income is reported at $17.05 billion, up 31.4% from the prior-year period. While its adjusted net income increased 38% year-over-year to $14.84 billion, its adjusted EPS increased 39.3% year-over-year to $1.95. As of March 31, 2021, the company had $13.70 billion in cash and cash equivalents.
A $1.95 consensus EPS estimate for the current quarter, ending September 30, 2021, represents a 6.9% improvement year-over-year. MSFT surpassed consensus EPS estimates in each of the trailing four quarters. The $42.37 billion consensus revenue estimate for the current quarter represents a 14.1% gain from the prior-year period. Analysts expect the stock’s EPS to grow at 17.2% per annum over the next five years. The stock has gained 28% over the past six months and closed yesterday’s trading session at $277.01.
MSFT’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Sentiment, and a B grade for Stability and Quality. Click here to see the additional ratings for MSFT (Growth, Value, and Momentum).
MSFT is ranked #16 of 132 stocks in the Software – Application industry.
CSCO designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to communications and information technology worldwide. The company sells its products and services directly and through systems integrators, service providers, resellers, and distributors.
CSCO is scheduled to pay a $0.37 quarterly dividend on July 28, 2021. The stock distributes a $1.48 per share dividend annually, which translates to a 2.79% yield. The company’s dividend has grown at a 9.2% rate over the past five years.
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