In this article, we discuss the 10 best tech stocks to buy. If you want to skip our detailed analysis of these stocks, go straight to 5 Best Tech Stocks to Buy.
Dividend investing is back in the spotlight in 2022 as the broader market suffers a massive downturn expected to last into 2023. Investors are looking for high-dividend stocks that are equally reliable and have safe and reliable dividend payments. The Fed is continuing to raise interest rates to control inflation. These rate hikes could lead to job losses in the near future. Stocks are also taking a hit, and they are not expected to recover anytime soon. This creates a lot of uncertainty for the market, especially among ordinary investors with limited budgets. They want to avoid investing in tech growth stocks, but at the same time don’t want to keep cash in their accounts. Given that you choose dividend stocks carefully, dividend investing is one of the best ways to store cash.
According to a CNBC article, Sam Stovall, chief investment strategist at CFRA Research, believes that dividend stocks can reduce overall volatility and provide a “buffer to offset price declines.” The CNBC report cited data to support that claim. The S&P 500 has fallen about 23% so far this year through September. On the other hand, the FTSE High Dividend Yield Index is down only about 5% over the same period. This shows that dividend stocks can easily offset market volatility.
Stovall also stressed the importance of a dividend reinvestment plan. Reinvested dividends have accounted for as much as 33% of the S&P 500’s total returns since 1945 through September, the analyst said. This data point shows that dividend stocks don’t just outperform when market conditions are tough. Smart investors have been enjoying the compounding effect of its dividend income across all market cycles. According to CNBC, the analyst said that dividend investing can “increase your performance by a third without doing anything.”
This compounding effect becomes more pronounced if we change the time period over which the reinvested dividend returns are calculated. According to a CNBC article, the S&P 500 has gained 1,455% since 1988. This means that if you invested $10,000 in 1988, you would be investing about $155,500 today. However, if you consider reinvesting dividends, your $10,000 would be $329,000. This is the power of compounding. Investors can offset risk and earn steady returns by investing in solid dividend stocks.
Photo by Alexandr Bormotin on Unsplashmethod
For this article, we’ve selected tech stocks with decent yields and a long history of dividends. Not only do these companies provide steady income, but their stock prices get a boost once the market starts to rebound. These companies have long-term growth catalysts and were also popular among the 895 hedge funds tracked by Insider Monkey at the end of the second quarter of this year.
The best tech dividend buys
10. Apple Inc. (NASDAQ: AAPL)
Apple Inc. (NASDAQ: AAPL) is rapidly gaining popularity as a powerful dividend-paying company in the technology space. Apple is one of those rare stocks that offers both long-term stock appreciation opportunities and steady dividend income. Apple Inc. (NASDAQ: AAPL) has consistently increased its dividend over the past 9 years. Apple shares recently rose nearly 9% after the company reported upbeat quarterly results, in line with skeptics predicting weaker iPhone sales figures. Dan Ives of investment firm Wedbush said in a report that Apple Inc. (NASDAQ: AAPL) proved to be “a bright spot” in tech earnings “horror show week.”
Apple Inc. (NASDAQ: AAPL) was the ninth most popular stock on a database of 895 hedge funds tracked by Insider Monkey at the end of the second quarter. Major hedge funds that have been receiving steady dividend income from the company include Warren Buffett’s Berkshire and Ken Fisher’s Fisher Asset Management.
Here’s what Wedgewood Partners has to say about Apple Inc. (NASDAQ: AAPL) in its third-quarter 2022 investor letter:
“Apple Inc. (NASDAQ: AAPL) Revenue rose 5% (FX-adjusted, excluding Russia), driven by record iPhone revenue, an increase of about 3% compared to a 50% increase in the year-ago quarter . Apple’s installed base of more than 1.8 billion devices has helped drive the software and services business, which has generated nearly $80 billion in revenue over the past four quarters. As we’ve highlighted in the past, Apple’s relentless focus on development and integration between hardware (especially ICs) and software continues to add significant value to customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future. “
9. Analog Devices Inc. (NASDAQ: ADI)
Massachusetts-based Analog Devices, Inc. (NASDAQ: ADI) is a semiconductor company specializing in signal conversion, data processing and power management technologies. Analog Devices (NASDAQ: ADI) had a dividend yield of 2.1% as of October 29. In February, the company raised its dividend by 10%. This marks the 19th time the company has increased its dividend in the past 18 years.
In October, Citi analyst Christopher Danely said in a note to investors that Analog Devices, Inc. (NASDAQ: ADI) is expected to be one of the outperformers in the current downturn, which he sees as a result. It was the worst “in at least a decade”. Analysts believe the economic downturn is affecting “every company and end market,” including Analog Devices. (NASDAQ: ADI), but said the company’s management was honest about the impact of the downturn and was taking steps to prepare the company for possible problems. His price target for Analog Devices is $195. (NASDAQ: ADI).
Here’s what the Madison Fund says about Analog Devices. In its third quarter 2021 investor letter:
“At Investor Day 2017, analog deviceMark Gill, vice president of automotive at the company, described how the company’s content on a well-equipped electric vehicle is $600 per vehicle, compared with $250 per vehicle for a traditional internal combustion engine vehicle in 2017. Since then, Analog has highlighted the success of its EV battery management system (BMS) product almost every quarter. BMS products are hardware and software that manage power to and from a battery system. This is the brain of surgery. Analog says it’s on its fifth-generation BMS product, it doesn’t. No. 1 in the market share of high-voltage products, and 5 of the top 10 electric vehicles. While we think BMS products represent only 1% to 1.5% of Analog’s portfolio, given the expected disaster in EV production, we think it could add nearly a point per year to the company’s top line growth. This is a substantial increase on top of an already well-growing company’s revenue line. “
8. Broadcom (NASDAQ: AVGO)
Broadcom (NASDAQ: AVGO) is one of the best tech stocks. The semiconductor and infrastructure software company has been increasing its dividend for more than a decade.
In October, Bank of America analyst Vivek Arya reiterated his buy rating on Broadcom. (NASDAQ: AVGO) stock along with several other peers, adding that the group will benefit from increased cloud spending despite current industry headwinds. The analyst specifically mentioned Broadcom’s Tomahawk 5 switches. (NASDAQ: AVGO) expected strength. Broadcom (NASDAQ: AVGO) has a relatively high dividend yield in the tech sector, at 3.4% as of Oct. 29.
At the end of the second quarter, 66 hedge funds tracked by Insider Monkey held shares in Broadcom. (NASDAQ: AVGO), compared to 71 funds in the previous quarter. Ken Fisher’s hedge fund was the company’s largest shareholder with a $716 million stake as of the end of June.
Here’s what Carillon Tower Advisers had to say about Broadcom. (NASDAQ: AVGO) in its Q2 2022 investor letter:
“Tech stocks, including Broadcom Corporation (NASDAQ: AVGO) was one of the hardest hit sectors amid concerns about a weaker macroeconomic environment. However, Broadcom has outperformed its semiconductor peers as its end-market exposure offers a relatively more defensive profile. “
7. Comtech Telecom (Nasdaq: CMTL)
Comtech (NASDAQ: CMTL) is a relatively unknown tech stock, trading around $11 as of Oct. 29. However, the stock has a dividend yield of 3.68%. In September, Comtech (NASDAQ: CMTL) declared a quarterly cash dividend of $0.10 per share. This is the company’s 49th consecutive quarterly dividend payout. That makes Comtech (NASDAQ:CMTL) one of the best dividend stocks on a budget for investors looking for steady income amid the financial turmoil in the coming months.
Comtech (NASDAQ: CMTL) recently won $50 million in incremental funding for its first quarter of 2023 for existing contracts to support the U.S. military’s next-generation troposcatter system.
Hedge funds are increasing their bets on the company. Fourteen of the 895 hedge funds tracked by Insider Monkey reported holding stakes in Comtech (NASDAQ: CMTL) as of the end of June, compared with nine funds in the previous quarter.
6. Cisco Systems (NASDAQ: CSCO)
Cisco Systems (NASDAQ: CSCO) is one of the tech industry’s best-known players. Cisco Systems, Inc.’s dividend yield exceeds 3%. (NASDAQ: CSCO) has been a solid income stock and a catalyst for long-term growth. In August, the company declared a quarterly dividend of $0.38 per share, in line with earlier.
In August, KGI Securities analyst Jackson Chiang gave an upgrade to Cisco Systems, Inc. (NASDAQ: CSCO) outperformed from neutral with a $53 price target. However, the stock has been under pressure this year due to a broader sell-off in the tech sector. Year-to-date, the stock has fallen 27%. At the end of the second quarter, 63 hedge funds tracked by Insider Monkey held shares in Cisco Systems. (NASDAQ: CSCO).
Here’s what the Carillon Eagle Growth & Income Fund has to say about Cisco Systems, Inc. (NASDAQ: CSCO) in its first-quarter 2022 investor letter:
“Cisco Systems (NASDAQ: CSCO) fell as investors weighed how supply chain issues will affect sales growth. The company has been upgrading its switching and routing products, which will lead to strong demand as field locations upgrade their infrastructure. “
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Disclosure: None. The 10 Best Tech Stocks to Buy Originally published on Insider Monkey.