Tech Giants IBM and HP Offer High Yields and Payout Growth
For decades, technology stocks were seen as growth-oriented companies that didn't pay dividends. However, many tech giants have matured and now offer attractive dividend yields.
Two such companies are IBM (IBM) and HP (HPQ), which have been paying dividends for a long time. IBM has maintained its streak of payout hikes for 31 consecutive years, with a current yield of about 2.9%. The company generated $14.6 billion in free cash flow over the previous year, more than enough to cover its dividend costs.
IBM's cloud transformation under CEO Arvind Krishna has been successful, and the stock has outperformed the S&P 500 over the last five years. With a P/E ratio of 21, IBM is considered reasonably priced.
HP, on the other hand, is a leading seller of computers, printers, and 3D printing solutions. Its payout has increased for several years, with a current yield of more than 4.1%. Despite struggling in recent years, HP's free cash flow was almost $3.8 billion over the trailing 12 months, well above its dividend costs.