Undeniably, the innovation space has been the darling of Wall Street, although shifting sands may prompt a discussion about tech dividend stocks. The tech-centric Nasdaq Composite index gained over 29% since the start of the year, well above the benchmark S&P 500’s performance of under 13% during the same period. Still, harsh realities cannot be ignored.
For example, in the trailing one-month period, the Nasdaq slipped more than 2%. Relatively speaking, that’s a better performance than the S&P 500’s print of down 3.2%. Nevertheless, neither index has demonstrated a decisively superior weathering of the storm. Therefore, the concept of tech stocks with dividends should appeal to concerned market participants.
Effectively, investors will be getting the best of both worlds. With tech dividend stocks, they’re exposed to the long-term fortunes of established innovation juggernauts. At the same time, they can collect passive income while waiting for the upside to materialize.
Of course, no investment is without risk. However, buying established innovators that pay may provide a nice balance. On that note, below are tech stocks with dividends to consider.
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A professional services firm, Accenture (NYSE:ACN) specializes in information technology services and consulting. Part of the esteemed Global Fortune 500, Accenture offers vast relevancies. As a result, shares gained almost 16% of equity value since the start of the year. That’s the case even with a contested ecosystem in the innovation space.
Still, it can’t be ignored that ACN went flat at the end of May this year. Further, the IT consultancy sector suffered a fall in spending as enterprises looked to save money. Nevertheless, Accenture believes that it can overcome the challenges the industry faces. Of course, there may be some frustrating sideways consolidation while waiting for shares to regain positive momentum.
With that, investors may want to consider ACN as one of the tech dividend stocks. Currently, it carries a forward yield of 1.65%, which isn’t generous. However, it has a history of 19 years of consecutive dividend increases.
Also, analysts rate shares a moderate buy. Interestingly, the high-side target comes in at $390, implying 25% growth.
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Headquartered in San Jose, California, NetApp (NASDAQ:NTAP) is a data storage and data management services company. Fundamentally, the data storage market offers significant upside. Per Fortune Business Insights, this sector will achieve a valuation of $247.32 billion this year. By 2030, the space will clock in at $777.98 billion. This translates to a compound annual growth rate (CAGR) of 17.8%.
Right there, that’s enough reason to consider NTAP one of the tech stocks with dividends. Also, it’s a solid performer in terms of capital gains. Since the beginning of this year, NTAP moved up more than 24%. Enticingly, there could still be some growth remaining. Right now, shares trade at only 13.65x trailing earnings. In contrast, the underlying sector comes in at 21.54x.
Regarding passive income, NetApp carries a forward yield of 2.65%. Just as well, the payout ratio sits at 32.47%, making NTAP one of the top tech dividend stocks. Per TipRanks, analysts peg NTAP as a moderate buy with an $80.80 target, implying 7% upside.
Hewlett Packard Enterprise (HPE)
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A multinational IT company, Hewlett Packard Enterprise (NYSE:HPE) is a business-focused entity, working in servers, storage, networking, containerization software, and consulting and support. According to Future Market Insights, the global software containers market may hit a valuation of $9.64 billion by 2032. That’s up significantly from the $3.256 billion valuation it achieved last year.
Based on this information, this segment alone may enjoy a CAGR of 11.5%. That would be great news for HPE, which operates under a competitive paradigm. Since the start of the year, shares gained just under 5%, which isn’t that inspiring. However, in the trailing one-year period, HPE skyrocketed just over 35%. Therefore, the potential is there.
While you’re waiting, you can pick up a forward yield of 2.85%. Enticingly, the payout ratio sits at only 22.31%, providing strong confidence for yield sustainability. Thus, HPE is a top player among tech dividend stocks. Analysts rate shares a moderate buy with an $18.40 target, implying over 9% growth potential.
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Based in San Diego, California, Qualcomm (NASDAQ:QCOM) ranks among the top multinational innovators. Per its public profile, it creates semiconductors, software, and services related to wireless technology. Because of its established presence, QCOM also happens to be one of the tech stocks with dividends. Unfortunately, its performance this year hasn’t been impressive to put it diplomatically.
Since the January opener, QCOM gained just over 3%. Fundamentally, the broader semiconductor industry faced significant concerns and still does. With demand for smartphones and PCs waning, Qualcomm’s total addressable market took a hit. However, the underperformance also means that QCOM trades with a forward earnings multiple of 11.99x. That’s favorably lower than 79.33% of the chip industry.
Looking at passive income, Qualcomm offers a forward yield of 2.89%. Also, the company features a history of 21 years of consecutive dividend increases. Thus, it’s a great candidate for tech dividend stocks. Lastly, analysts rate QCOM a moderate buy with a $135.35 target, implying 22% upside.
Juniper Networks (JNPR)
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Based in Sunnyvale, California, Juniper Networks (NYSE:JNPR) is a multinational corporation that develops and markets networking products. These include routers, switches network management software, network security products, and software-defined networking technology. Naturally, all these specialties command exceptional relevance. However, the security element distinguishes JNPR as a top candidate for tech dividend stocks.
In August, household goods giant Clorox (NYSE:CLX) disclosed it suffered a serious cyberattack. Recently, the company revealed the extent of the financial harm through its preliminary fiscal first-quarter report. Unsurprisingly, the news took investors by shock, who subsequently exited out of CLX as fast as they could. By logical deduction, the incident only served to underscore the importance of holistic cybersecurity.
The other element that bolsters JNPR is the passive income. Here, Juniper offers a forward yield of 3.31%. Just as encouragingly, the payout ratio sits at 37.36%, making JNPR one of the most attractive tech stocks with dividends.
Analysts peg JNPR as a moderate buy with a $32.64 target, implying nearly 23% growth.
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Understandably a controversial company, RTX (NYSE:RTX) recently underwent a name change. Previously, it operated under the banner Raytheon Technologies. More than likely, the move won’t stop investors from viewing the firm as one of the top defense contractors. However, it also enjoys other avenues working in its favor, such as the space economy. As such, RTX ranks among the best tech dividend stocks.
According to McKinsey & Company, the space market – which recently grew to approximately $447 billion – could hit a valuation of $1 trillion by 2030. Just as importantly if not more so, many countries are competing for dominance in space. Naturally, not all of these nations are friendly to the U.S. and the West in general. So, like it or not, RTX is supremely important.
Turning to passive income, RTX commands a forward yield of 3.38%. Also, it enjoys 30 years of consecutive dividend increases. Thus, it’s one of the tech stocks with dividends to put on your shortlist.
Lastly, analysts rate RTX as a moderate buy with an $88.29 target, implying almost 27% upside.
International Business Machines (IBM)
One of the tech dividend stocks that arguably gets more attention for its passive income rather than its innovations, IBM (NYSE:IBM) has long symbolized a frustrating case for investors. On one hand, it’s difficult to ignore its rich history. Founded in 1911, “Big Blue” as it’s known has gone through multiple bullish and bearish cycles. Still, on the flip side, it hasn’t kept pace with modern competitors.
Since the start of the year, IBM stock gained only slightly above parity. In the past 60 months, shares have returned less than 6%. I’m sorry but as an innovator, that’s difficult to swallow. Still, a case could be made that it’s unfairly overlooked. Given its decades of research with artificial intelligence protocols, Big Blue deserves at least some consideration. Plus, it only trades at a forward earnings multiple of 14.07X.
What can be said is that IBM provides a big dividend. Its forward yield stands at 4.68%, well above the tech sector’s average yield of 1.37%. Also, it commands 30 years of consecutive dividend increases.
Finally, analysts only rate it a hold with a $147.27 target, implying under 4% growth. Still, this could be deeply off based on its valuation.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.