Tech stocks have surged in popularity among investors, promising substantial returns. Their resurgence in the past year has sparked renewed interest, propelling the upward trend.
Aside from the allure of tech stocks, investors also value dividends for their cushion against market downturns and as a means of generating passive income.
A Deeper Dive Into Tech Dividends
Interestingly, certain tech companies such as Dell Technologies (DELL), Garmin (GRMN), and Vipshop (VIPS) offer regular quarterly dividends to their shareholders.
Let’s examine each of these opportunities closely.
The Case of Vipshop
Vipshop, currently holding a Zacks Rank #1 (Strong Buy), operates as an online discount retailer for various brands. Over the past year, its earnings estimates have experienced a robust 46% increase for the current fiscal year, projecting a 7% year-over-year growth.
Image Source: Zacks Investment Research
The company boasts a solid annual yield of 2.4%, exceeding the Zacks Computer & Technology sector average. Continuously surpassing expectations, Vipshop has exceeded the Zacks Consensus EPS estimate by an average of 21% across its last four quarters.
Exploring Dell Technologies
Dell Technologies holds a Zacks Rank #2 (Buy) and specializes in providing information technology solutions. With an annual yield of 1.7%, the company maintains a sustainable payout ratio at 26% of its earnings.
Analysts hold an optimistic view on Dell’s future, with a 25% increase in the Zacks Consensus EPS for the current year, suggesting nearly 8% year-over-year growth.
Image Source: Zacks Investment Research
Navigation with Garmin
Garmin, a Zacks Rank #2 (Buy), specializes in manufacturing navigation and communication equipment utilizing GPS technology. The company offers a competitive annual yield of 2.1%, supported by a sustainable 52% payout ratio.
Garmin has shown consistent dividend growth, with a notable 6.7% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
The Verdict
Far from mundane, dividend-paying tech stocks offer an exciting opportunity for investors seeking both exposure to the tech sector and reliable quarterly payouts. Dell Technologies (DELL), Garmin (GRMN), and Vipshop (VIPS) not only meet these criteria but also hold favorable Zacks Ranks, reflecting positive analyst sentiment.
