The S&P 500, Dow, and Nasdaq all closed at new highs to start the week as they continue their strong November run amid better-than-feared quarterly earnings results and solid U.S. jobs and consumer data. Stocks did slip Wednesday and Thursday, as the U.S. and China hit another bump in the trade war road.
With this in mind, investors might want to search for strong and established companies that pay a dividend to help bolster their portfolios amid renewed uncertainty. Despite the apparent U.S.-China setback, stocks could still climb in 2019 and beyond, and the tech industry remains a key growth driver.
Therefore, we searched for tech companies with our Zacks Stock Screener that also pay a dividend…
Intel is the largest semiconductor maker in the U.S. by revenue. The company posted impressive Q3 results on October 24, with its shares up 12% since then and 23% over the last 12 months. The chip giant also raised its full-year outlook as part of what looks like a broader industry-wide comeback that includes the likes of Nvidia NVDA and others.
Intel showed strength in its data center-focused business that is projected to play a key role in the firm’s future amid the continued expansion of cloud computing. CEO Bob Swan boasted that the recently reported quarter highlighted the progress of Intel’s data-centric businesses, which made up nearly half of total revenue. “We've been on a multiyear journey to reposition Intel’s portfolio to take advantage of the exponential growth of data,” Swan said in prepared remarks
Our current Zacks estimates call for Intel’s full-year fiscal 2019 sales and earnings to climb slightly, with 2020’s adjusted earnings expected to pop 2.4% on 1.6% stronger sales. Intel’s positive earnings revision trends help it earn a Zacks Rank #2 (Buy). INTC also holds a “B” grade for Growth and “A” for Value in our Style Scores system. Intel is part of our Semiconductor – General industry that sits in the top 19% of our more than 250 Zacks industries. And Intel pays an annualized dividend of $1.26 per share for a yield of 2.18%, which tops the 10-year U.S. Treasury note’s 1.77%.
Garmin, like Intel, topped quarterly estimates in October, with revenue up 15%, and raised its sales and EPS guidance. The firm, which is famous for its in-car GPS devices, fitness trackers and smartwatches that compete against the likes of Apple AAPL and Fitbit FIT, also sells a ton of other products from high-end fish finders to advance radars for aviation and boating. In fact, Garmin’s aviation, fitness, outdoor, and marine units drove most of Q3’s revenue, with auto down 17%.
Garmin’s Fitness unit surged 28% as part of a booming wearables industry, which is part of the reason why Google GOOGL decided to buy Fitbit. The firm’s aviation division also climbed 28%. And perhaps more importantly, Garmin on October 30 announced its new Autoland system that will “control and land the aircraft without human intervention” in the event of an emergency. “Today, aviation is forever changed as we introduce one of the industry’s most significant innovations – the first Autoland system for general aviation aircraft,” CEO Cliff Pemble said in prepared remarks.
Shares of GRMN have surged 23% in the last three months and 51% in the last year to crush its industry’s 10% average climb. In fact, Garmin stock hit a brand new high on Thursday. The GPS firm’s climb makes its current 2.35% dividend yield all the more impressive and it easily tops Apple’s 1.17%. Garmin is currently a Zacks Rank #1 (Strong Buy) and sports an “A” grade for Momentum. Garmin’s full-year FY19 sales are projected to jump 9.2% to reach $3.65 billion to help lift earnings by nearly 13%.
Shares of Microsoft have skyrocketed nearly 50% in 2019 and 145% in the last three years. The historic tech firm’s cloud computing expansion helped drive this growth. For example, Microsoft’s Q1 fiscal 2020 sales jumped 14% on the back of 27% expansion in its Intelligent Cloud unit, which beat Wall Street estimates and topped Q4’s 19% growth.
Microsoft is now the second-largest cloud firm behind only Amazon AMZN. The Redmond, Washington-headquartered firm has also continued to innovate within Office, Windows, and devices, as it completes key acquisitions such as LinkedIn. Peeking ahead, Microsoft’s revenues are projected to pop roughly 11% in fiscal 2020 and 2021. And MSFT’s adjusted full-year EPS figures are expected to surge 12.3% in each of the next two years.
MSFT’s longer-term positive earnings estimate revision activity helps it earn a Zacks Rank #2 (Buy) right now, along with an “A” grade for Momentum. Microsoft returned 28% more to shareholders through dividends and repurchases last quarter. Plus, MSFT announced in September that it raised its quarterly dividend by 11% and approved a new share repurchase program. The firm currently pays an annualized dividend of $1.84, for a 1.36% yield—its new quarterly payout will amount to an annualized dividend of $2.04 per share.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
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Microsoft Corporation (MSFT) : Free Stock Analysis Report
Fitbit, Inc. (FIT) : Free Stock Analysis Report
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