Tech stocks have been unpredictable at times recently, and though the sector has proven it can rebound from volatility strongly, it is likely that tech-minded investors are joining the risk-averse masses and searching for stability in their picks.
This means now might be the time for techies to take a page out of the income investing book, which would tell us to focus on companies with solid dividends.
Finding a strong dividend-yielding tech stock might feel like searching for a golden goose, but investors should not feel too intimidated. In fact, dividend-focused investors can search for the best tech stocks by using the Zacks Stock Screener, the perfect one-stop screening tool for investors of all kinds.
By limiting our search to companies in our “Computer and Technology” sector with Zacks Rank #2 (Buy) or better rankings, we can ensure that we are finding the highest quality stocks to buy right now. Throw in your preferred dividend yield and voila—the best tech stocks for dividend investors to target!
Check out these three stocks to buy now:
1. AVX Corporation (AVX)
AVX Corporation is a U.S.-based manufacturer of passive electronic components. It primarily makes and sells capacitors and connectors for automotive braking, cell phones, and medical devices. AVX is a member of the Russell 2000 index. Right now, the stock has a #1 (Strong Buy) rating and pays a dividend yield of 2.6%.
Earnings estimates are on the rise for the current fiscal year ending in March, as well as the following fiscal year. AVX also has a solid track record of consistent dividends and has raised the payout a few times in recent years. In addition to its strong Zacks Rank, AVX has an “A” grade in the Value category of our Style Scores system. It trades at under 12x earnings, which is a noticeable discount to its industry’s average.
2. Verizon Communications Inc. (VZ)
Many investors don’t lump telecoms into the technology basket, but industry behemoth Verizon can certainly make a case for inclusion given its innovation in 5G networking and investment in digital media content. What’s more, Verizon has a #2 (Buy) rating and presents a dividend yield of 4.3%. Verizon has also added to its quarterly payouts in every year that our data has records of.
As many as eight analysts have revised their Verizon 2019 EPS estimates higher within the past 30 days. The stock also held up well during the market’s volatile stretch. It’s up about 8% over the past six months. Still, the valuation is in check. Shares are trading at just 12x earnings, which is reasonable considering where its rivals fall. Meanwhile, Verizon has an expected long-term EPS growth rate of 4.1%.
3. Advantest Corp. (ATEYY)
Advantest is one of the world’s leading test equipment suppliers to the semiconductor industry. It hasn’t been the best stretch for most stocks involved in the chip business, but ATEYY is looking like a unique case. While many chip and chip equipment stocks are guiding lower and seeing downward estimate revisions, ATEYY is actually witnessing positive revisions to its EPS estimates.
Advantest has a Zacks Rank #1 (Strong Buy). The company pays out its dividend on a semi-annual basis. For the current fiscal year ending in March, it expects a year-end payment of approximately $0.23 per share, up about two cents from last year. ATEYY also has a Forward P/E of 9.7, which is a discount to its industry’s average. The stock has earned an “A” grade in our Value category.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
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