The S&P 500 has climbed 14% in 2019, driven by comebacks from tech giants like Netflix NFLX and Facebook FB. Yet this past week has seen U.S./China trade war worries heat up again, which might have some investors looking for stable income.
Therefore, we have highlighted three large-cap stocks that present solid dividend yields and might be worth considering as uncertainty rebounds—at least for now. More specifically, we dive into three stocks that also offer investors exposure to growing tech industries.
AT&T stock has lagged the market in 2019 and is communing off a slightly worse-than-expected first quarter of 2019. Nonetheless, the wireless communication giant looks set to remain a dominant force. The company’s $85 billion merger with Time Warner, which includes WarnerMedia’s HBO, Turner, and Warner Bros, is officially complete and is set to help it compete in a streaming age against Netflix NFLX, Amazon Prime AMZN, Disney DIS, Apple AAPL, Comcast CMCSA, and others.
AT&T also boasts enterprise-level telecom offerings, along with internet services, DIRECTV, U-Verse cable, and more. AT&T is also poised to benefit from the eventual 5G revolution that will shape the near-term future of high-speed communication. Meanwhile, T’s price/sales ratio of 1.1 marks a discount compared to its industry’s 1.4 average and rivals such as Verizon VZ and T-Mobile TMUS. On top of that, AT&T is currently trading at 8.4X forward 12-month Zacks Consensus EPS estimates. This comes in well below the S&P’s 16.8X, its industry’s 11.5X average, as well as its own five-year high 15.1X and its five-year median of 12.9X.
Therefore, we can say that AT&T stock is relatively “cheap” at the moment. Plus, the company currently pays an annualized dividend of 2.04 a share, with a 6.71% yield. AT&T is a Zacks Rank #3 (Hold) that sports an “A” grade for Value in our Style Scores system. AT&T stock opened Friday at $30.25 per share.
Broadcom Inc. AVGO
Broadcom designs and manufactures a wide range of semiconductor and infrastructure software solutions that help support the growth of everything from wireless networks and storage solutions to data centers. AVGO saw its first quarter 2019 revenue jump 9% to reach $5.79 billion, at a time when many of the biggest names in the chip space, including Nvidia NVDA, dipped on the back of various headwinds. The San Jose, California-headquartered company also generated more than $2 billion in free cash flow, up nearly 40% year over year.
AVGO stock has climbed 18% to start the year and 23% over the last 12 months to outpace the larger semiconductor market’s nearly 7% average decline—fueled by drop offs from Micron MU, Intel INTC, and others. Broadcom shares opened Friday at $303.23, down 6% from their 52-week highs. Moving on, AVGO also recently paid a quarterly dividend of $2.65 per share for an annualized payout of $10.60 a share. Broadcom’s current dividend yield rests at 3.49%.
Looking ahead, our Current Zacks Consensus Estimates call for its adjusted second-quarter 2019 earnings to pop nearly 6% on the back of 13% revenue growth. Meanwhile, the company’s full-year EPS figure is projected to jump over 11% on 17.2% top-line expansion. This anticipated fiscal 2019 growth comes as much of the rest of the industry looks poised to head in the wrong direction. And Broadcom has seen its longer-term earnings estimate revision activity trend heavily upward recently. AVGO is currently a Zacks Rank #3 (Hold) and rocks “B” grades for Growth and Momentum in our Style Scores system.
Cisco Systems, Inc. CSCO
This historic networking power has expanded its IoT business in recent years, offering clients the ability to connect everything from transportation fleets to assembly lines in order to run their operations more efficiently. Cisco shares have jumped 21% in 2019 to help the company reach new 52-week highs along the way. CSCO stock is now up roughly 56% over the last two years. Despite the climb, shares of Cisco opened at $52.61 Friday, down 9% off their recent highs. This could give the stock room to run heading into Cisco’s adjusted Q3 fiscal 2019 earnings, which are due out Wednesday, May 15.
The firm’s adjusted EPS figure is projected to surge nearly 17% on 3.5% revenue growth. Peeking ahead, Cisco’s current full-year earnings are projected to climb roughly 17.7% to hit $3.06 per share. Furthermore, the company’s bottom line is expected to jump 10.5% above our current year estimate in fiscal 2020. Meanwhile, Cisco’s full-year 2019 revenue is projected to pop 4.75% and then come in 3.4% higher in the following year.
Cisco’s positive earnings estimate revision activity helps it earn a Zacks Rank #2 (Buy) at the moment, along with an “A” grade for Momentum. CSCO is currently trading just below its industry’s average forward P/E at 17.8X forward 12-month Zacks Consensus EPS estimates. Cisco also pays an annualized dividend of $1.40 per share, with a 2.65% yield at the moment. Plus, Cisco’s $0.35 quarterly dividend marked a 6% increase from the $0.33 per share it paid last year and a 20% improvement on a two-year stack.
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Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
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