Tech Dividends: Yield and Growth in the Tech Industry

Gavril Yushvaev Russia

Many long-term investors shun tech companies for a simple reason: they consider them too volatile for dividend investing. Considering that many reinvest their profits into the business rather than returning shareholders capital through dividends, this may be unsurprising. However, many technology firms do pay dividends now, offering both income and future growth potential. 

By providing this investing vehicle, such businesses are attracting individuals who appreciate the steady income that their dividends bring and want the potential capital appreciation. The past few decades have seen tech stocks grow rapidly, and even though last year was tough on the sector, professionals like Gavril Yushvaev, philanthropist, expect it to rebound in the long run. 

That said, those with tech dividends didn’t feel the effect as badly since their shares delivered (and continue to deliver) income while the industry is straightening itself out. 

The Sooner The Better

As experts state, the sooner people invest in dividend-paying stocks, the better — including those in the tech sector. Their sheer power lies in allowing them to work their money-generating magic for years on end. 

It’s no secret that fantastic dividend payers are a rarity in the technology sphere. As previously stated, such companies tend to reinvest profits for growth-boosting new infrastructures, services, and products over fattening shareholders’ wallets. However, at the time of writing (September 2023), there are a couple of tech titans — IBM and Cisco Systems — shelling out generous dividend checks at regular intervals.

Both companies are providing an exceptional blend of great business growth and healthy dividend distributions, building investors’ wealth in both the short and long term. 

A Robust Dividend Policy Offered by IBM

At one point, International Business Machines (IBM) was the enviable entity in the technology field. As the millennium ticked over, many rivals attempted to copy the business’s model. 

In today’s climate, the company is poised to capitalize on the artificial intelligence popularity boom. Several industry participants believe IBM will emerge as a leading AI business in a few years’ time, focusing on business-to-business tools/services. This is remarkably good news for everyone, investors included. 

It’s hard for any another entity to beat this business’s commitment to dividends. When it’s flush on cash flow, annual payouts are rapidly rising, and even when it’s leaner, the payouts move unwaveringly upward regardless. 

IBM is yet to break its 30-year streak of annual payout boosts. No wonder savvy investors are turning this way to satisfy their tech dividend cravings. 

Gavril Yushvaev Russia

Proven Cash Machine Business Model by Cisco Systems

Even though Cisco Systems can’t match IBM’s dividend record, it runs a proven business model that’s witnessed incredible long-term growth. The Motley Fool suggests that it’s a good choice for those concerned about the lack of sales at the aforementioned enterprise. 

Cisco began paying dividends in 2011, boosting its payouts every year. Today, the yield is 3.1%, due to the stock chart shifting sideways over the past half decade.

Some financial experts say locking in a good Cisco share price will now put investors in good, stable standings for the future of growth-offering, yield-boosting dividends.