If you are an income investor, tech companies are unlikely to be your main target. Returning value to shareholders through dividend payments is not the priority of these high-flying names who generally reinvest additional capital to further boost their growth.
That said, you can still find a handful of top tech companies paying growing dividends each year, making them a good fit for any retirement portfolio. These names generally offer a combination of capital appreciation and decent quarterly income.
Here's a look at three technology stocks that pay steadily growing dividends, making them a great addition to your retirement portfolio:
1. Broadcom Inc.
Broadcom (NASDAQ:) is one of the world's largest chip manufacturers, also making smartphone parts, key networking equipment components and semiconductors for Wi-Fi equipment and home set-top boxes.
Broadcom's extensive reach across multiple sectors gives investors both a reliable income stream and added . While Broadcom stock has risen more than 200% in the past five years, its dividend has more than tripled from $1.02 per share per quarter in 2017 to $3.60.
Broadcom Weekly Chart.
The stock is currently yielding more than 3% – a return that is higher than the average return that companies offer.
California-based Broadcom is in a strong position to reward its investors with hefty payouts going forward as demand for its chips remains strong. About 90% of Broadcom's 2021 offering has already been ordered by customers. Normally, chipmakers have locked up about a quarter of their stock in this way.
2. Seagate Technology
The largest computer drive maker, Seagate Technology (NASDAQ:) is another reliable dividend stock to keep in your retirement portfolio.
Seagate Technology Weekly Chart.
The company benefits from data center owners who struggle to keep up with the need for storage created by the flow of data from online services. Such demand is helping the California-based company stave off dwindling demand from the PC market, where semiconductor-based storage is taking over.
In April, Seagate offered a positive outlook for the current quarter, helped by cloud demand for high-capacity drives.
Seagate Chief Executive Officer Dave Mosley said in a statement:
"We increased revenue, increased profitability and achieved a non-GAAP EPS that is above our target range. Our March quarterly results underscore the strength of our HDD product portfolio and the increasing demand for mass-capacity storage."
With an annual dividend yield of more than 3%, Seagate pays $0.68 per share each quarter. While the growth rate in payouts has been about 4% over the past five years, the company has enough runway to increase it. Current dividend payments are less than half of expected earnings per share.
3. Texas Instruments
Texas Instruments (NASDAQ:), a technology giant that produces electronic products, including chips used in many diversified industries, is another solid name to add to your revenue portfolio.
TI gets most of its products from industrial equipment manufacturers. It also produces semiconductors that fit in everything from vehicles to home electronics and space hardware.
Texas Instruments Weekly Chart.
But the biggest draw for long-term investors is the company's dividend program, which grows every year. With an annual dividend yield of about 2%, TI currently pays $1.02 per share per quarter, which has grown 23% per year for the past five years.
With a payout ratio of just over 60%, TI is in a comfortable position to increase its dividend going forward. In addition, the company's long-term growth prospects are bright with the amount of electronics being added to cars and machines.
