From Nasdaq: 2024-05-18 07:30:00

Alphabet’s decision to issue a dividend highlights the shift of tech stocks becoming dividend payers. While Alphabet’s 0.5% dividend yield may not appeal to income investors, other tech companies like IBM and Cisco offer more attractive cash returns exceeding the S&P 500’s average. These three stocks show potential for growing payouts.

IBM, a pioneer in tech, raised its dividend to $6.68 per share annually, marking the 29th consecutive year of an increase. With a 4% dividend yield, IBM is becoming a notable cloud and AI player under the leadership of CEO Arvind Krishna. Free cash flow covers the dividend cost, suggesting potential for further hikes.

Crown Castle, a REIT specializing in wireless infrastructure towers, offers shareholders a 6% cash return with its annual $6.26 per share dividend. Despite challenges, such as a recent CEO change and revenue declines, Crown Castle has maintained a streak of annual dividend increases. Favorable financials support the likelihood of future payout hikes.

Cisco Systems, once a leading internet builder, now provides a 3.2% dividend yield with its $1.60 per share annual payout. Although a slower-growth stock, Cisco has steadily increased its dividend since 2011. Recent acquisitions and strong free cash flow indicate promising dividend growth potential.

Considering investing in International Business Machines? The Motley Fool Stock Advisor team has identified other top stocks for potential high returns. While IBM wasn’t on the list, historical returns of other recommended stocks show significant growth. Their guidance and regular stock picks have outperformed the S&P 500 since 2002. *Disclosure: The author may have positions in mentioned stocks.



Read more at Nasdaq: 3 Dividend-Paying Tech Stocks to Buy in May