{"id":2807,"date":"2023-10-18T16:44:35","date_gmt":"2023-10-18T16:44:35","guid":{"rendered":"https:\/\/infundpros.com\/investment\/2-big-tech-dividends-that-are-soaring-not-because-of-ai\/"},"modified":"2023-10-18T16:44:37","modified_gmt":"2023-10-18T16:44:37","slug":"2-big-tech-dividends-that-are-soaring-not-because-of-ai","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=2807","title":{"rendered":"2 Big Tech Dividends That Are Soaring (Not Because Of AI)"},"content":{"rendered":"
\n

Our favorite tech-sector dividend growers are finally<\/em> on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived.<\/p>\n

Our Tech Buying Opportunity: Fully Booted Up<\/h2>\n

These days, fear surrounds us, and we contrarian income seekers know<\/em> that times of fear are when we go shopping. That goes double for tech stocks, which tumble when the 10-year rises (and vice versa).<\/p>\n

Take last year, when the rate on the \u201clong bond\u201d spiked and high-flying techs, shown in purple below by the performance of the benchmark Technology Select Sector SPDR ETF (XLK
\n
\n XLK
\n <\/fbs-ticker>)<\/strong> hit the deck:<\/p>\n

<\/fbs-ad><\/p>\n

Sure, the AI hype has fueled a nice rebound this year, but this latest spike in the 10-year has given us a nice\u2014and rare\u2014second chance to buy in, washing out many of our faves.<\/p>\n

Over the last few weeks, I\u2019ve been saying the 10-year would bump its head on the \u201c4.3% ceiling\u201d and retreat. The fact that it\u2019s blown through<\/em> that ceiling only means its fall will be that much harder\u2014and our favorite tech-sector dividend payers will rip that much higher in response!<\/p>\n

We\u2019ve already started to see that happen, but it\u2019s not too late to lock in historically high payouts (and rapid payout growth) from our favorite big-name techs.<\/p>\n

Here\u2019s something else most folks forget when it comes to Big Tech: it\u2019s sitting on a pile of cash rivaling that of just about any sector except banks. The poster child here, of course, is Apple
\n
\n AAPL
\n <\/fbs-ticker> (AAPL),<\/strong> with its $167-billion hoard. As that cash gets put to work in buybacks, dividends, R&D or, as we\u2019ll see in the two stocks below, acquisitions, we stand to benefit.<\/p>\n

Big Tech Dividend No.1: Cisco Systems (CSCO)<\/h2>\n

Cisco\u2019s networking gear puts it square in the tracks of AI\u2019s rapid growth. But that\u2019s just the headline. Look deeper and you\u2019ll see something equally important: Its ongoing move into software\u2014which, in turn, is driving its shift to a subscription-based model.<\/p>\n

That shift will further stabilize Cisco\u2019s revenue, and it\u2019s taking hold nicely, with recurring revenue rising 5% in its 2023 fiscal year, to make up 43% of the total.<\/p>\n

The company\u2019s acquisition of Splunk
\n
\n SPLK
\n <\/fbs-ticker> (SPLK), <\/strong>announced in September, is yet another move in this direction, bringing in Splunk\u2019s subscription-based cybersecurity software and putting Cisco in an even better position to leverage AI.<\/p>\n

Cisco can easily afford Splunk, with $26 billion in cash and just $8 billion in long-term debt, a sliver of the company\u2019s $219-billion market cap. Even so, it trades at just 13.3-times forward earnings. The deal won\u2019t jeopardize Cisco\u2019s payout growth, as it\u2019s expected to add to cash flow in the first year. Plus, the dividend\u2014current yield: 2.9%\u2014already makes for a light load, at just 33% of Cisco\u2019s last 12 months of free cash flow (FCF).<\/p>\n

And while this payout isn\u2019t growing as fast as it once did, it is a reliable \u201cmagnet\u201d on the share price.<\/p>\n

And we\u2019ll give management a bit of a pass on payout growth because they\u2019re buying back shares at a solid pace, as shown in the blue line above. And check out the drop in shares outstanding as everything\u2014particularly tech\u2014went into the dumpster in \u201922. That\u2019s a sign management knows when its stock is oversold\u2014and when to accelerate its buybacks. That\u2019s the kind of savvy we want.<\/p>\n

Big Tech Dividend No. 2: Broadcom
\n
\n AVGO
\n <\/fbs-ticker> (AVGO)<\/strong><\/p>\n

Semiconductor maker Broadcom ticks many of the same boxes as Cisco, starting with gains as AI drives demand for computing power. But there is one key difference: much<\/em> faster dividend growth<\/em>.<\/p>\n

Let\u2019s rattle through the similarities between these two tech-dividend giants:<\/p>\n

    \n
  1. No rate worries,<\/strong> thanks to a \u201cfortress\u201d balance sheet: Broadcom\u2019s sitting on $12 billion<\/em> in cash, and while it does carry $39 billion in debt, that\u2019s just over 10% of its (massive) value as a public company: $373 billion. Peanuts.<\/li>\n
  2. A big acquisition: <\/strong>That strong balance sheet leaves Broadcom plenty of room to close its looming $75-billion cash-and-stock purchase of VMware
    \n
    \n VMW
    \n <\/fbs-ticker> (VMW)<\/strong>. The move will boost Broadcom\u2019s presence in AI and cloud computing. Plus, VMW is profitable, with EPS jumping 34% in the latest quarter and revenue up 2.2%<\/li>\n
  3. A safe dividend, <\/strong>at 43% of FCF, this one\u2019s also easy to carry, especially when you consider revenue was up 5% in the last quarter, while EPS jumped 8%.<\/li>\n
  4. A potent Dividend Magnet:<\/strong> No question! As I\u2019ve said before, share prices always<\/em> catch up to dividend growth\u2014something Broadcom\u2019s stock resisted for most of the past decade\u2014till its 1,700% (!) payout growth in that time recently broke the stalemate.<\/li>\n<\/ol>\n

    To be sure, that stunning payout and share-price growth have left Broadcom pricier than Cisco, at 21-times forward earnings. So it may not rip quite as high when rates do pull back. But that quadruple-digit dividend growth will build on the 2% yield you\u2019d get on a buy made today in short order. And with Broadcom set to announce its next hike in December, we won\u2019t have to wait long to get started.<\/p>\n

    Brett Owens is chief investment strategist for <\/em>Contrarian Outlook<\/em>. For more great income ideas, get your free copy his latest special report: <\/em>Your Early Retirement Portfolio: Huge Dividends\u2014Every Month\u2014Forever.<\/p>\n

    Disclosure: none<\/em><\/p>\n<\/div>\n

    Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying…<\/p>\n","protected":false},"author":1,"featured_media":2808,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":{"0":"post-2807","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investment"},"yoast_head":"\n2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros<\/title>\n<meta name=\"description\" content=\"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/infundpros.com\/?p=2807\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros\" \/>\n<meta property=\"og:description\" content=\"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying\" \/>\n<meta property=\"og:url\" content=\"https:\/\/infundpros.com\/?p=2807\" \/>\n<meta property=\"og:site_name\" content=\"inFundPros\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-18T16:44:35+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-18T16:44:37+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/1697647476_0x0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1600\" \/>\n\t<meta property=\"og:image:height\" content=\"900\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Press Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Press Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/infundpros.com\/?p=2807#article\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/?p=2807\"},\"author\":{\"name\":\"Press Room\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\"},\"headline\":\"2 Big Tech Dividends That Are Soaring (Not Because Of AI)\",\"datePublished\":\"2023-10-18T16:44:35+00:00\",\"dateModified\":\"2023-10-18T16:44:37+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/infundpros.com\/?p=2807\"},\"wordCount\":899,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"articleSection\":[\"Investment\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/infundpros.com\/?p=2807#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/infundpros.com\/?p=2807\",\"url\":\"https:\/\/infundpros.com\/?p=2807\",\"name\":\"2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros\",\"isPartOf\":{\"@id\":\"https:\/\/infundpros.com\/#website\"},\"datePublished\":\"2023-10-18T16:44:35+00:00\",\"dateModified\":\"2023-10-18T16:44:37+00:00\",\"description\":\"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying\",\"breadcrumb\":{\"@id\":\"https:\/\/infundpros.com\/?p=2807#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/infundpros.com\/?p=2807\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/infundpros.com\/?p=2807#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/infundpros.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"2 Big Tech Dividends That Are Soaring (Not Because Of AI)\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/infundpros.com\/#website\",\"url\":\"https:\/\/infundpros.com\/\",\"name\":\"Fintech Advance\",\"description\":\"Latest Finance and Tech News and Updates\",\"publisher\":{\"@id\":\"https:\/\/infundpros.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/infundpros.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/infundpros.com\/#organization\",\"name\":\"Fintech Advance\",\"url\":\"https:\/\/infundpros.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png\",\"width\":409,\"height\":70,\"caption\":\"Fintech Advance\"},\"image\":{\"@id\":\"https:\/\/infundpros.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff\",\"name\":\"Press Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/infundpros.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"contentUrl\":\"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png\",\"caption\":\"Press Room\"},\"sameAs\":[\"https:\/\/infundpros.com\"],\"url\":\"https:\/\/infundpros.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros","description":"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/infundpros.com\/?p=2807","og_locale":"en_US","og_type":"article","og_title":"2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros","og_description":"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying","og_url":"https:\/\/infundpros.com\/?p=2807","og_site_name":"inFundPros","article_published_time":"2023-10-18T16:44:35+00:00","article_modified_time":"2023-10-18T16:44:37+00:00","og_image":[{"width":1600,"height":900,"url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/1697647476_0x0.jpg","type":"image\/jpeg"}],"author":"Press Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Press Room","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/infundpros.com\/?p=2807#article","isPartOf":{"@id":"https:\/\/infundpros.com\/?p=2807"},"author":{"name":"Press Room","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff"},"headline":"2 Big Tech Dividends That Are Soaring (Not Because Of AI)","datePublished":"2023-10-18T16:44:35+00:00","dateModified":"2023-10-18T16:44:37+00:00","mainEntityOfPage":{"@id":"https:\/\/infundpros.com\/?p=2807"},"wordCount":899,"commentCount":0,"publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"articleSection":["Investment"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/infundpros.com\/?p=2807#respond"]}]},{"@type":"WebPage","@id":"https:\/\/infundpros.com\/?p=2807","url":"https:\/\/infundpros.com\/?p=2807","name":"2 Big Tech Dividends That Are Soaring (Not Because Of AI) | inFundPros","isPartOf":{"@id":"https:\/\/infundpros.com\/#website"},"datePublished":"2023-10-18T16:44:35+00:00","dateModified":"2023-10-18T16:44:37+00:00","description":"Our favorite tech-sector dividend growers are finally on sale\u2014and our time to \u201clock in\u201d these fast-growing payouts has arrived. Our Tech Buying","breadcrumb":{"@id":"https:\/\/infundpros.com\/?p=2807#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/infundpros.com\/?p=2807"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/infundpros.com\/?p=2807#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/infundpros.com\/"},{"@type":"ListItem","position":2,"name":"2 Big Tech Dividends That Are Soaring (Not Because Of AI)"}]},{"@type":"WebSite","@id":"https:\/\/infundpros.com\/#website","url":"https:\/\/infundpros.com\/","name":"Fintech Advance","description":"Latest Finance and Tech News and Updates","publisher":{"@id":"https:\/\/infundpros.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/infundpros.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/infundpros.com\/#organization","name":"Fintech Advance","url":"https:\/\/infundpros.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/tech-logo.png","width":409,"height":70,"caption":"Fintech Advance"},"image":{"@id":"https:\/\/infundpros.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/infundpros.com\/#\/schema\/person\/87f7e632b195ea95c91503d9281f5eff","name":"Press Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/infundpros.com\/#\/schema\/person\/image\/","url":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","contentUrl":"https:\/\/infundpros.com\/wp-content\/uploads\/2023\/10\/avatar_user_1_1697230663-96x96.png","caption":"Press Room"},"sameAs":["https:\/\/infundpros.com"],"url":"https:\/\/infundpros.com\/?author=1"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/2807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2807"}],"version-history":[{"count":1,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/2807\/revisions"}],"predecessor-version":[{"id":2809,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/posts\/2807\/revisions\/2809"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=\/wp\/v2\/media\/2808"}],"wp:attachment":[{"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infundpros.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}