The growth of tech dividends and the sector’s massive cash hoards increase QQQ’s allure.
In 2014, the average dividend increase from Apple (NasdaqGS: AAPL), IBM (NYSE: IBM), Cisco (NasdaqGS: CSCO) and Qualcomm (NasdaqGS: QCOM) was 14%. Importantly, the tech sector has ample room for dividend growth.
“Some industry-leading companies have been hoarding cash. Consider that four information-age bellwethers―Apple, Microsoft, Google and Cisco―possess a combined $345 billion in cash. And the overall tech sector holds more than half of total corporate cash reserves in the U.S.,” said BlackRock Global Investment Strategist Heidi Richardson in a recent note. “With strong balance sheets, these companies are well-positioned to deliver returns through share repurchases, dividend increases and mergers and acquisitions.” [Time to Embrace Old Tech ETFs Again]
QQQ allocates a combine 19.1% of its weight its weight Apple, Cisco and Qualcom. Five of the ETF’s top 10 holdings are dividend payers.
Tom Lydon’s clients own shares of QQQ ad Apple.