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      Top 10 US Tech Stocks With Dividends - Stocks Telegraph

      By Fahim Awan

      Published on

      September 6, 2023

      1:33 PM UTC

      Top 10 US Tech Stocks With Dividends - Stocks Telegraph

      In the ever-evolving landscape of the US technology sector, a select group of companies stands out.

      This is not only for their innovative prowess but also for their commitment to providing dividends to their shareholders.

      These top 10 US tech stocks with dividends represent a compelling blend of cutting-edge technology and stable income generation.

      In this article, we embark on a journey to explore these remarkable companies, dissecting their financial health, growth prospects, and dividend policies.

      As investors seek stability and growth in their portfolios, understanding the dynamics of these giants in our tech stocks list becomes paramount.

      Join us in unraveling the dividends within the digital realm.

      Importance of Investing in Tech Stocks with Dividend

      • Unlocking Wealth Potential

        Investing in tech stocks in 2023 with dividend income presents a compelling opportunity for investors seeking both growth and stability.

        This strategy combines the potential for capital appreciation with consistent returns, providing a well-rounded approach to wealth accumulation.

      • Maturing Tech Landscape

        Traditionally, tech companies reinvested profits heavily in research and development. However, today’s tech landscape has evolved.

        Many tech giants have reached a level of maturity where they can allocate substantial portions of their earnings to reward shareholders.

      • Steady Income Stream

        Dividend payments from tech companies offer a reliable income stream, often on a quarterly basis.

        This dependable source of income can be particularly attractive for investors looking to supplement their cash flow or fund their retirement.

      • Capital Appreciation

        Tech stocks have a history of delivering robust capital appreciation over time.

        By combining dividend income with the potential for stock price growth, investors can benefit from a dual-pronged approach to wealth accumulation.

      • Hedging Against Volatility

        The sector of tech stocks USA can be volatile, but dividend payments provide a cushion during market downturns.

        These payouts of tech stocks in 2023 will still act as a hedge, reducing the impact of market fluctuations on your overall portfolio.

      • Tech’s Enduring Influence

        In an age where technology continues to reshape industries and economies, investing in tech stocks with dividends aligns with a forward-thinking investment strategy.

        It allows investors to participate in the ongoing tech revolution while enjoying the security of regular income.

      Benefits of Tech Stocks with Dividends

      Investing in tech stocks USA companies that pay dividends provides a unique opportunity to benefit from the innovation and growth potential of the tech sector.

      This investment strategy makes those tech stocks in 2023 an appealing choice for a wide range of investors.

      • Income Stability in Volatile Sector

        Investing in tech companies that pay dividends provides a reliable source of income in an otherwise volatile sector.

        While tech stocks can experience significant price swings, dividends offer a consistent stream of returns.

        This income can help investors weather fluctuations in the prices of tech stocks in US market and maintain financial stability.

      • Diversification Benefits

        Dividend-paying tech stocks USA often have diverse revenue streams and established market positions.

        This diversification reduces the risk associated with concentrating investments in younger, high-growth startups.

        By investing in dividend-yielding tech firms, investors can benefit from both the tech sector’s innovation and the stability associated with mature companies.

      • Financial Health

        Companies that pay dividends typically have strong financial fundamentals.

        They generate consistent cash flow, which enables them to reward shareholders with dividends.

        This financial stability is a testament to their ability to weather economic downturns and sustain growth over the long term.

      • Capital Appreciation Potential

        In addition to regular dividend income, investors can also benefit from capital appreciation.

        Tech companies that pay dividends, often continue to innovate and grow, potentially leading to increased stock prices over time.

        This dual advantage of income and growth potential can enhance the overall returns on investment.

      • Attractive For Income-Oriented Investors

        For investors seeking income from their portfolios, dividend-paying tech companies offer an attractive option.

        These dividends can supplement other sources of income, such as bonds or fixed-income investments.

        It makes them a valuable component of an income-focused investment strategy.

      • Long-Term Wealth Creation

        Investing in dividend-paying tech companies can contribute to long-term wealth creation.

        The combination of regular income and the potential for capital appreciation can result in substantial returns over an extended investment horizon.

        This not only makes it a prudent choice for investors but also has a long-term perspective.

      Top 10 US Tech Stocks with Dividends

      1. United Microelectronics Corporation (UMC)

        First in our tech stocks list is United Microelectronics Corporation (NYSE: UMC).

        The stock, though often overshadowed by larger competitors, presents an appealing investment opportunity.

        With a market cap of over $17 billion, UMC is a significant player in Taiwan’s semiconductor industry.

        UMC faces geopolitical risks related to Taiwan-China relations and may have limitations on capital investment compared to rivals like TSM.

        But still, its stock is attractively priced, trading at less than 10 times forward earnings. UMC also offers an 8.3% dividend yield, although this can fluctuate with annual profits.

        Overall, UMC is a semiconductor company that consistently rewards shareholders, making it a promising choice for investors.

      2. International Business Machines Corp. (IBM)

        International Business Machines Corp. (NYSE: IBM) IBM, once a computing giant among tech stocks in US market, faced setbacks due to missed tech shifts.

        However, the company is now on a promising path. In 2021, it smartly divested its underperforming unit and has since seen a rebound in revenues.

        This resurgence is driven by IBM’s substantial investments in cloud computing and AI, especially Watson.

        While the stock price might not seem stellar, considering the generous 4.47% dividend yield and total returns, it reached a new high in December 2022.

        With shares trading at under 15 times forward earnings, IBM offers a bright prospect for tech dividend investors, heralding a positive future.

      3. Fidelity National Information Services Inc. (FIS)

        Fidelity National Information Services Inc (NYSE: FIS) offers diverse financial solutions, but its stock has faced recent setbacks due to industry trends.

        However, with a forward valuation of less than nine times earnings and the upcoming Worldpay division spinoff, there’s potential for a turnaround.

        The company’s stock has experienced a notable decline in the past year, primarily attributed to a broader market shift away from the payments sector.

        Presently, FIS stock is trading at a valuation of nearly nine times its projected earnings, making it an intriguing investment proposition.

        With an appealing annual dividend yield of 3.70%, FIS stock secures its place in our tech stocks list for being a promising stock for investors seeking steady income.

      4. Texas Instruments Inc. (TXN)

        Texas Instruments (NASDAQ: TXN) leads the world in analog semiconductors, which translate real-world data for machines.

        These chips boast enduring product cycles and stable sales, setting them apart in the semiconductor landscape.

        Texas Instruments’ focus on smart vehicles and appliances positions them for growth, especially as the automotive industry electrifies and adopts advanced features.

        Texas Instruments is poised to significantly amplify its sales of analog chips to original equipment manufacturers.

        While TXN stock faced recent challenges due to semiconductor industry dynamics, this is a short-term issue.

        Looking ahead, TXN’s stock offers a promising 3% yield against a backdrop of over 21 times forward earnings, signaling bright prospects for investors.

      5. Qualcomm Inc. (QCOM)

        Qualcomm Inc. (NASDAQ: QCOM) shines brightly among tech stocks in US market as a pioneering semiconductor powerhouse, spearheading telecom innovation.

        Leveraging its rich history in 3G and 4G mobile technology, it now takes a leading role in the 5G revolution.

        Snapdragon chipsets empower high-end devices, with a strong fiscal Q2 2023 performance.

        For the period, QCOM boasted over $1.4 billion in operating cash flow and $834 million returned to shareholders.

        Although 2023 presented stock challenges due to industry shifts, Qualcomm’s diverse strengths offer an alluring opportunity.

        With a forward P/E ratio of just above 12 and a 2.76% dividend yield, optimism abounds for its mobile AI dominance and a 20-year dividend growth record.

      6. Cisco Systems Inc. (CSCO)

        Cisco Systems Inc. (NASDAQ: CSCO) exemplifies tech evolution.

        While its stock performance trailed competitors, Cisco’s core business thrived, generating over $50 billion in annual revenue and $11.3 billion in net income.

        While the sales of networking equipment have stabilized, Cisco has adeptly transitioned towards software and services.

        CSCO is especially targeting cybersecurity, complementing its conventional networking gear offerings.

        With a 12-year dividend growth streak, offering a 2.9% yield, and trading at less than 14 times forward earnings, Cisco is now an appealing value stock.

        This transformation paints an optimistic picture of resilience and adaptability in the ever-changing tech landscape, offering investors a promising outlook for the future.

      7. Lockheed Martin Corporation (LMT)

        Lockheed Martin Corporation (NYSE: LMT), a leader in defense technology, continues to thrive. Goldman Sachs holds 1.2 million LMT shares worth $566.2 million.

        In Q2 2023, LMT surpassed expectations with a non-GAAP EPS of $6.73 and $16.7 billion in revenue.

        The U.S. Army awarded a significant $4.8 billion contract, reflecting heightened demand for Lockheed Martin’s expertise.

        These long-term contracts provide stability for future planning and investments.

        Lockheed Martin’s commitment to shareholders is unwavering, with a consistent $3 per share quarterly dividend and a remarkable 20-year history of dividend growth.

        Despite high forward earnings, the stock maintains an appealing 2.69% dividend yield.

      8. Open Text Corp. (OTEX)

        Open Text Corp. (NASDAQ: OTEX), a dynamic Canadian software and solutions company, continues to evolve and expand through strategic acquisitions.

        Its recent acquisition of Micro Focus for $5.8 billion in 2023 enhances its European market presence remarkably.

        Moreover, a flourishing partnership with Google Cloud promises to unlock the potential of AI-powered integrations.

        This will drive rapid insights, productivity gains, and exceptional customer experiences.

        Despite its strong growth trajectory, Open Text’s stock is attractively priced at around eight times forward earnings, making it an enticing investment opportunity.

        Additionally, it generously offers a 2.49% dividend yield, highlighting the company’s commitment to delivering value to its investors.

      9. Broadcom Inc. (AVGO)

        Broadcom Inc. (NASDAQ: AVGO) shines as a mighty American semiconductor titan, boasting a robust workforce of 20,000 and a staggering $33 billion in annual revenue.

        With the green light from UK antitrust regulators for its colossal $69 billion acquisition of VMware Inc., Broadcom’s future looks exceptionally bright.

        Their Q2 2023 revenue of $8.73 billion marked a remarkable 7.8% YoY growth, fueling a substantial surge in share prices amid a bullish semiconductor market.

        Notably, Broadcom has consistently increased dividends for 12 years, presently offering an annual dividend of $18.40 per share with a 2.10% yield.

        AVGO also maintained a favorable valuation at under 20 times forward earnings and returned $2 billion to shareholders.

      10. Automatic Data Processing, Inc. (ADP)

        Automatic Data Processing, Inc. (NASDAQ: ADP) is flourishing in the cloud-based business outsourcing sector, with a strong Q3 2023 performance.

        Their revenue surged to $4.9 billion, up by 8.9% from the previous year, and their operating cash flow reached an impressive $3.02 billion.

        While ADP’s valuation at 25 times earnings might seem rich, it’s justified by their potential for continued earnings growth and their secure market position.

        ADP has an exceptional 48-year streak of increasing dividends, currently offering a 1.98% yield with an annual payout of $5.00 per share.

        Investors, including billionaires, are finding ADP a promising technology dividend stock.

      Factors To Consider When Investing In Tech Stocks With Dividends

      Investing in tech stocks with dividends requires a balanced approach. Investors should prioritize companies with strong indicators.

      Moreover, staying informed about the current trends in tech world is an essential element of a successful investment strategy in this sector.

      • Financial Stability

        Investors should begin by assessing the financial stability of the tech company in question.

        This involves examining its balance sheet, income statement, and cash flow statements to ensure it has a consistent and robust cash flow.

        A solid financial foundation is crucial to support reliable dividend payouts.

      • Growth Potential

        Evaluate the growth potential of the tech sector itself. Consider market trends, technological innovation, and competition.

        Investing in tech stocks with dividends should align with the broader growth prospects of the industry.

        Companies operating in sectors with significant growth potential are better positioned for sustained dividend payments.

      • Diversification

        Diversification is a fundamental principle of risk management. Spread investments across various tech subsectors to reduce risk exposure.

        Different segments of the tech industry may perform differently under varying market conditions. Diversification can help mitigate potential losses.

      • Dividend History And Payout Ratio

        Analyze the company’s dividend history. Look for a consistent track record of dividend payments and, if possible, dividend increases over time.

        Assess the dividend payout ratio, which indicates the proportion of earnings used to pay dividends. A lower payout ratio suggests more room for future dividend growth.

      • Macroeconomic Conditions and Interest Rates

        Consider macroeconomic factors that can impact dividend yields. Changes in interest rates can influence the attractiveness of dividend stocks relative to other investments.

        A rising interest rate environment may put downward pressure on stock prices, affecting dividend yields.

      • Regulatory Environment

        Stay informed about regulatory changes that could affect the tech industry.

        Government policies, trade regulations, and antitrust actions can have a significant impact on tech companies and their ability to maintain dividends.

        Being aware of regulatory developments is crucial for informed decision-making.

      Risks and Challenges of Investing Dividend-Paying Stocks

      While dividend-paying stocks offer stability and income potential, investors must navigate these associated risks and challenges.

      Due diligence and adaptability to make informed investment decisions is key to success.

      • Income Dependence and Economic Downturns

        Investing in dividend-paying stocks can be enticing for the reliable income stream they offer. However, during economic downturns or financial crises, companies may reduce or suspend dividend payouts.

        Overreliance on this income can be precarious, especially for retirees or income-dependent investors.

      • Market Volatility and Stock Price Fluctuations

        Dividend stocks are not immune to market volatility. Stock prices can fluctuate significantly, affecting the total return on investment.

        Investors should be prepared for the possibility of capital losses, even with dividend-paying stocks.

      • Lack of Diversification

        A common pitfall is overconcentration in a specific sector or industry to maximize dividend yields.

        This lack of diversification exposes investors to sector-specific risks. A downturn in the chosen sector can lead to substantial losses.

      • Inflation Erosion

        While dividends provide a steady income stream, the purchasing power of those dividends can erode over time due to inflation.

        Investors may find that the real value of their dividends diminishes if they don’t keep pace with rising prices.

      • Company Financial Health

        Monitoring the financial health of the companies in one’s dividend portfolio is crucial.

        Companies that struggle with debt, declining revenues, or management issues may be at risk of cutting dividends. Staying informed and conducting due diligence is essential.


      In a dynamic market where innovation and stability converge, these top-performing tech stocks with dividends serve as the epitome of investment wisdom.

      Their resilient performance and commitment to shareholder value underscore their significance.

      As we navigate the intricate landscape of technology-driven financial opportunities, these stocks stand tall as pillars of growth and income.

      In an ever-evolving world, they offer investors a blend of innovation and security, a testament to the enduring power of American tech giants.

      The fusion of technology and dividends remains a beacon of wealth creation, ensuring a prosperous future for those who choose wisely.

      FAQs (Frequently Asked Questions)

      What Are Tech Stocks With Dividends, And Why Should I Consider Them For My Portfolio?

      Tech stocks with dividends refer to shares in technology companies that distribute a portion of their profits to shareholders as dividends.

      These stocks offer a unique blend of growth potential and income, making them attractive for diversifying a portfolio.

      They provide stability and long-term value, enhancing overall investment strategy.

      How Do I Choose The Best Tech Stocks With Dividends For Long-Term Investment?

      Selecting top-performing tech stocks with dividends for long-term investment requires thorough research.

      Analyze a company’s financial stability, dividend history, growth prospects, and competitive positioning within the tech sector.

      Diversify your portfolio, stay informed about industry trends, and consider consulting a financial advisor for a well-informed investment strategy.

      What Is The Significance Of A Company’s Dividend Yield When Selecting Tech Dividend Stocks?

      The dividend yield of a tech company holds vital significance in investment decisions.

      It reflects the company’s financial health and commitment to returning value to shareholders.

      A higher yield may suggest stability, while a lower one may indicate growth potential. Balancing yield with tech sector dynamics is crucial for informed investing.

      Are Dividends From Tech Stocks Taxed Differently From Other Income?

      Dividends from tech stocks, like other qualified dividends, are subject to tax rates ranging from 0% to 20%, depending on your income. This favorable tax treatment may differ from ordinary income tax rates.

      Investors should consult a tax professional for guidance on optimizing their tax strategy when investing in tech stocks.

      Can Tech Companies Sustain Dividend Payments During Economic Downturns?

      In the crucible of economic downturns, the resilience of tech companies in sustaining dividend payments emerges as a pivotal question.

      The capacity to balance innovation, cost management, and financial stability becomes the litmus test for their commitment to shareholders amidst turbulent economic waters.

      What Role Does A Company’s P/E Ratio Play In Dividend Stock Selection?

      The Price-to-Earnings (P/E) ratio serves as a pivotal metric in dividend stock selection.

      It aids investors in evaluating a company’s stock by assessing its valuation and potential for sustainable dividends.

      A lower P/E ratio may indicate an attractive entry point, while a higher ratio demands careful consideration of future dividend stability.

      Should I Reinvest Dividends From Tech Stocks Or Take Them As Cash?

      When pondering whether to reinvest dividends from tech stocks or opt for cash, consider your financial goals.

      Reinvestment can foster long-term growth, while cash provides liquidity.

      A diversified approach, tailored to your objectives, may strike the right balance between capital appreciation and income generation.

      How Can I Evaluate The Financial Health Of A Tech Company Before Investing?

      Assessing the fiscal well-being of a tech firm prior to investment necessitates a multifaceted approach.

      Scrutinize financial statements for robust revenue growth, healthy profit margins, and manageable debt levels.

      Additionally, consider the company’s competitive positioning, innovation potential, and its ability to adapt to dynamic market trends for a comprehensive evaluation.

      Are There Any Specific Sectors Within The Tech Industry That Are More Likely To Pay Dividends?

      Within the tech industry, sectors like software development, cloud computing, and artificial intelligence have strong potential for dividend payouts due to high demand.

      However, dividends can fluctuate with market dynamics, emphasizing the importance of diversification for long-term success.

      What Is The Historical Performance Of Tech Stocks With Dividends Compared To Growth-Only Tech Stocks?

      Over the annals of financial history, tech stocks with dividends have demonstrated resilience and stability, catering to income-seeking investors.

      In contrast, growth-only tech stocks have often delivered remarkable capital appreciation, attracting those with a penchant for high-risk, high-reward investments. Diverse strategies thus coalesce in the dynamic tech sector.

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