Why Tech Companies Are Passing Out Dividends and Powering ETFs

March 27, 2009 at 11:00 am by Tom Lydon      Bookmark and Share

Dividend ETFsGood news flooded the week for the markets, with the dividend news adding positive results to stocks and exchange traded funds (ETFs) within the technology sector.

The tech industry is now ripe with large-cap companies that are well-established from the dot-com boom. Many are in a position to share their income streams with their shareholders, as Oracle (ORCL) led the good news amid their declaration of their first-ever quarterly dividend at 0.5 cents per share, reports Dividend Growth Investor.

Other heavyweight tech companies, such as Microsoft (MSFT) and Cisco (CSCO), are not displaying the rapid growth as they once were. As a result, they start distributing larger portions of their net incomes to shareholders in the form of dividends. But will they continue to do so after the dividend tax is repealed?

  • Technology Select Sector SPDR (XLK): up 4.9% year-to-date; Cisco is 6.1%; Microsoft is 9.1%; Oracle is 4.6%

  • WisdomTree LargeCap Dividend (DLN): down 13.1% year-to-date; yields 5.2%; Microsoft is 2%

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