Dividend stocks have been a good way to generate more attractive payouts in an ongoing low-yield environment, and income-minded investors should also consider the often overlooked technology stocks and related exchange traded funds for yields as well.
Tech stocks can be a good source of dividends backed by some of the sturdiest American companies, reports, John Waggoner for InvestmentNews.
Traditionally, tech companies have not considered paying back their investors. Instead, many firms opted to reinvest cash back into the company or buy back stocks.
However, times are changing, and the technology sector of the S&P 500 is now among the top dividend issuers. Technology companies began to compensate shareholders during the financial crisis, and the habit stuck.
The Technology Select Sector SPDR (NYSEArca: XLK), which tracks S&P 500 technology companies, comes with a 1.85% 12-month yield.
Looking ahead, most tech companies have enough cash hoards to keep up their dividends for years. For instance, Microsoft (NasdaqGS: MSFT) is holding on to $102.6 billion, Cisco (NasdaqGS: CSCO) has $59.1 billion on hand and Oracle (NYSE: ORCL) has $52.3 billion.