In today’s environment, one particular area of focus has been dividend-paying equities, made attractive not only because of the current income but also because of the potential for future growth of that income. Given concern about interest rates rising, there has been an even greater focus on companies that have potential to deliver dividend growth over companies with just the highest dividend yields.
Technology Sector Leading Dividend Growth
There have been large changes in the composition of dividends and dividend growth in the United States over the last five to six years. Back in 2007, the technology sector comprised only 5.6% of the WisdomTree Dividend Stream®, but today (September 24, 2013) it comprises 14.2%. It is by far the leading sector in terms of growth over this period.
Microsoft is the latest technology firm to announce a large increase—a quarterly dividend increase of 22% and a $40 billion share repurchases program. Amy Hood, chief financial officer of Microsoft, said, “These actions reflect a continued commitment to returning cash to our shareholders.”1 The following are a few other large tech firms that have announced dividend increases in 2013:2
• Apple—15% increase
• IBM—11.8% increase
• Cisco—21.4% increase
• Qualcomm—40% increase
• Texas Instruments—33% increase