Dividend investing typically has the reputation of being a slow and steady way to grow your account and generate stable income. Some of the most well-known dividend stocks offer predictable revenue streams and lower volatility, which can be very attractive depending on your investment goals. That’s why they are so popular with retirees and conservative investors. With that said, certain dividend stocks that feature nice payout ratios along with big earnings growth potential if you know which industries to look at.
For example, some stocks in the technology sector offer investors capital appreciation upside combined with steady dividend payments. There are 3 dividend-paying tech stocks in particular that investors should consider buying now. Let’s learn more about them below.
Equinix, Inc. (NASDAQ:EQIX)
First up on our list is Equinix, the largest global data center operator in the world. Data centers will play a crucial role in cloud computing over the next decade as more and more companies look to optimize their technology infrastructures. This stock is a Real Estate Investment Trust (REIT) that includes a huge footprint of 210 data centers in 55 markets on 5 different continents. Equinix’s clients are looking for power, floor space, security, and cooling for the equipment that they store inside its facilities. The company also offers data services, information protection, and edge computing services.
This is a very unique REIT that offers significant upside thanks to the growing demand for cloud-based services and the necessity for large enterprises to connect to numerous providers using a colocation data center. The company currently has over 10,000 customers and over 1,800 network service providers that rely on each other, which means it can be hard for other data center providers to gain market share from Equinix. The stock offers investors a 1.49% dividend yield and has pulled back roughly 15% from its October highs, offering an intriguing entry point for long-term investors at this time.
Texas Instruments (NASDAQ:TXN)
If you are interested in a company that creates products that are essential in the digital age, look no further than Texas Instruments. The semiconductors that Texas Instruments designs, manufactures, and sells are integral to pretty much all electronic equipment, which means the company’s revenue streams are reliable and have room to grow. The company’s chips are used in tons of different products including automotive safety devices, portable power supplies, visual displays, touchscreen controllers, and much more.
Investors should be attracted to the opportunities that Texas Instruments has in the industrial space along with 5G. The company has grown its dividend by 157% over the last five years and continues to acquire manufacturing equipment at low prices which allows it to return more cash to shareholders over the long run. Texas Instruments stock offers a 2.51% dividend yield at this time and the company has a healthy balance sheet with $5.5 billion in cash. This is a great option for investors that are interested in a tech company with a leading market share and one of the strongest dividend growth rates.
Apple (NASDAQ:AAPL)
The last stock on our list is a familiar name that could be in for a truly memorable 2021. You are probably already familiar with this company’s products which include smartphones, tablets, wearables, PCs, software, and more. Over the years, Apple has continuously proven to investors that it will never run out of ways to innovate and create new products that consumers love. With the launches of several new products including the iPhone 12, a $10 per month Apple Fitness Plus subscription service, and the Airpods Max, sales could be strong for Apple in 2021 and reward shareholders with solid earnings growth.
Perhaps what’s most impressive about Apple at this time is the fact that it continues to see double-digit growth in its services segment, which includes things like Apple Music, Apple TV+, and the App Store. Apple has one of the best balance sheets out of any stock with a net cash position of $84 billion and a 5-year dividend growth rate (CAGR) of 10.5%. The stock offers investors a dividend yield of 0.64% which might seem low, but investors should also factor in share repurchases and the enormous cash position that the company has. It’s clear that Apple is a company that belongs in any portfolio and the stock could hit the ground running in 2021 after consolidating for several months.
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