Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20
U.S. Long Bond: Let's Review the "Upward Point of Exhaustion" - 27th Jun 20
Gold, Copper and Silver are Must-own Metals - 27th Jun 20
Why People Have Always Held Gold - 27th Jun 20
Crude Oil Price Meets Key Resistance - 27th Jun 20
INTEL x86 Chip Giant Stock Targets Artificial Intelligence and Quantum Computing for 2020's Growth - 25th Jun 20
Gold’s Long-term Turning Point is Here - 25th Jun 20
Hainan’s ASEAN Future and Dark Clouds Over Hong Kong - 25th Jun 20
Silver Price Trend Analysis - 24th Jun 20
A Stealth Stocks Double Dip or Bear Market Has Started - 24th Jun 20
Trillion-dollar US infrastructure plan will draw in plenty of metal - 24th Jun 20
WARNING: The U.S. Banking System ISN’T as Strong as Advertised - 24th Jun 20
All That Glitters When the World Jitters is Probably Gold - 24th Jun 20
Making Sense of Crude Oil Price Narrow Trading Range - 23rd Jun 20
Elon Musk Mocks Nikola Motors as “Dumb.” Is He Right? - 23rd Jun 20
MICROSOFT Transforming from PC Software to Cloud Services AI, Deep Learning Giant - 23rd Jun 20
Stock Market Decline Resumes - 22nd Jun 20
Excellent Silver Seasonal Buying Opportunity Lies Directly Ahead - 22nd Jun 20
Where is the US Dollar trend headed ? - 22nd Jun 20
Most Shoppers have Stopped Following Supermarket Arrows, is Coughing the New Racism? - 22nd Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Investment Opportunities in High Dividend Paying Tech Stocks

Companies / Dividends Nov 12, 2008 - 11:55 AM GMT

By: Money_and_Markets

Companies Diamond Rated - Best Financial Markets Analysis ArticleNilus Mattive writes: Last week, I told you that McDonald's is a great example of a company with strong fundamentals and continued dividend strength. Yesterday, we saw more proof: The company said global same-store sales gained 8.2%. And even as most other restaurants posted weak U.S. results, McDonald's watched same-store sales gain 5.3% here in the States.

That's great news for anyone holding the shares!

Now today, I want to talk about some more companies that are bastions of dividends. And the place where I'm finding them may surprise you …

Tech Stocks Keep Jumping to the Top of My Dividend Lists!

Remember that table from “ Yes, You Can Still Find Solid, Reliable, Fat Dividends ?” It showed some of the companies that changed their dividend policies in September. Just in case you missed it, let me show it to you again:

Big Dividend Actions Last Month …
Company/Ticker Action Change Sector
Amer Intl Group/AIG Suspension -100% Financials
Federal Home Loan/FRE Suspension -100% Financials
Federal Natl Mtge/FNM Suspension -100% Financials
Lehman Br Holdings/LEH Suspension -100% Financials
Wachovia Corp/WB Suspension -100% Financials
Washington Mutual/WM Suspension -100% Financials
Comerica Inc/CMA Decrease -50% Financials
Campbell Soup/CPB Increase 14% Staples
Lockheed Martin/LMT Increase 36% Industrials
McDonald's Corp/MCD Increase 33% Discretionary
Microsoft Corp/MSFT Increase 18% Technology
Natl Semiconductor/NSM Increase 33% Technology
Texas Instruments/TXN Increase 10% Technology
Tyco Intl/TYC Increase 33% Industrials
Verizon Communications/VZ Increase 7% Telecom
Source: Standard & Poor's

One thing really jumps out at me — of the eight companies that increased their dividends, three are from the technology sector. And another — Verizon — is very closely related to tech, too.

Look the size of the increases, too. Microsoft boosted its payment by a solid 18%, and National Semi hiked a whopping 33%! Those aren't token increases … they demonstrate solid financial wherewithal and loyalty to shareholders.

But how are tech companies boosting their dividends right now? Aren't they the kind of firms most hurt by economic downturns?

On one hand, the answer is, “yes” — tech companies do feel the bite of weaker economic conditions. Many of their products are discretionary items themselves. Take software, for example. You might delay upgrading to the latest version of Windows right away. Ditto for video game systems like Xbox 360.

It's the same thing in the case of semiconductors. Many of these tiny circuits end up in discretionary items like cellphones and televisions.

So demand for tech products is clearly cyclical. Always has been. Even corporate customers, which make up a large percentage of tech buys, can — and will — wait to upgrade their systems when business is on the decline.

Despite the cyclicality, America's best tech companies still have big brand names. Their sizable businesses are difficult to compete with. Cash flows remain strong.

Plus, these companies have shown rigid fiscal responsibility, especially after the tech bubble burst. They have clearly survived tough times before, and are well aware of the risk of not being prepared for future downturns. As a result, these companies boast strong balance sheets.

Maybe that's why a bunch of tech firms also turned up in another list I published in the January 2008 issue of Dividend Superstars . At the time, I was looking for dividend stocks that met five criteria Warren Buffett might use, including:

  • A healthy return on equity
  • Solid profit margin
  • Low debt
  • Great cash flow
  • Favorable valuations

Take a look at the names I came up with:

Name/Ticker ROE Profit Margin Debt/Equity Free Cash Flow (Mil.) P/E
Aspen Insurance Holidngs/AHL 20.20 24.04 9.13 962.40 6.16
Axis Capital Holdings/AXS 26.01 34.69 10.10 1623.62 6.47
Endurance Specialty Holdings/ENH 22.07 28.50 17.71 545.65 5.08
Federated Investors/FII 38.15 20.40 14.04 343.99 19.70
Garmin Ltd./GRMN 39.19 26.56 0.03 492.31 18.65
Microchip Technology/MCHP 17.77 23.46 0.00 345.70 21.04
Microsoft/MSFT 35.84 31.17 0.00 17250.00 20.90
Occidental Petroleum/OXY 24.27 27.35 8.65 3254.00 15.17
Paychex/PAYX 31.07 28.97 0.00 631.81 23.04
Qualcomm Inc./QCOM 19.92 49.05 0.00 2993.00 20.28
RenaissanceRE holdings/RNR 29.53 31.70 10.52 879.31 5.69
RLI Corp./RLI 20.21 38.86 18.61 162.63 8.13
T. Rowe Price Group/TROW 24.18 29.62 0.00 627.99 21.81
Terra Nitrogen/TNH 54.79 34.26 0.00 168.72 17.32
Texas Instruments/TXN 30.84 21.19 0.00 3109.00 17.56
Tidewater Inc./TDW 19.86 27.10 18.50 113.86 8.33
Data as of January 2008

I've highlighted all the tech sector names. As you can see, two are the same companies that boosted their dividends last month. Coincidence? I think not!

Remember, You Can Find Dividends in Unlikely Places;
That's Especially True in these Rapidly Changing Markets

It's ironic that as the housing bubble bursts and takes out a whole host of once-solid financial companies, tech firms are emerging as solvent, well-insulated income investments. But based on the information I'm seeing, that's precisely what's happening.

As investors, we need to recognize that the landscape is continually shifting. New leaders can emerge, and an area once barren of dividends, may quickly become an income oasis.

The mainstream media is too busy to notice, of course. Whenever they talk about technology stocks it's only to compare one bubble to another.

Sure, technology was all about unsustainable growth in 2000. But the surviving tech companies have already been through tough times. They've lost investor confidence before. More than most firms, they need to prove that their business models are legitimate and profitable. And as far as I'm concerned, nothing can do that better than steadily rising dividend payments.

While I'm not saying this is the time to plow in and buy dividend tech stocks haphazardly, there are a few that I'm watching closely. They are still very exposed to market downdrafts because of their cyclicality, too. But I suggest you put a few of these on your radar screen. We may see good entry points in the near future.

Best wishes,


P.S. As soon as I see buy signals in these dividend tech stocks, I'll be recommending them to my Dividend Superstars subscribers. If you're not yet a member, sign up now for just $39 . You'll get 12 monthly issues, all my buy and sell signals, and a whole bunch of special reports. Click here for all the details.

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules