3 Tech Stocks That Pay Dividends: Apple, Intel, Hercules Tech
Technology investors are used to not getting paid dividends. These companies and the analysts that promote them will claim that the profits are better spent investing in the business, or, if the company doesn’t yet have any profits, they will claim that the company’s patents or its research is sufficient justification for investing.
Such claims must be assessed on a case-by-case basis. However, I think that technology investors should try in some way to bring some dividends into their portfolios. While a company that pays dividends has less capital to invest in its business than if it hadn’t paid these dividends, the fact remains that a company that pays dividends is most likely profitable, and it will be able to sustain these profits for a long time.
Furthermore, just because a company pays a dividend doesn’t mean it doesn’t have sufficient capital with which to invest in research. Of the three companies I list here, this is the case for two of them, and the third provides seed capital to smaller tech companies that have enormous upside potential. In short, you can invest in innovative technology companies while still collecting a nice dividend.
1. Apple (NASDAQ:AAPL)
Apple has admittedly become a less exciting company as it has grown into the largest publicly traded company in the world — mega-cap companies simply cannot grow very quickly. However, it has a portfolio of excellent products and an unbeatable arsenal of patents that enable it to generate about $35 billion in income each year. If we couple that with its $40 billion cash position, it seems inevitable that Apple would pay a dividend.
Right now, Apple pays out a 2.25 percent dividend, which exceeds that of the S&P 500. It is also growing its dividend — in its most recent earnings announcement, Apple said that it was raising its dividend by about 8 percent. The company still has room to raise it further.