Mature tech companies, such as Apple and Microsoft, can help investors generate income by way of steadily increasing dividends. That is a departure from the tech boom of the 1990s when dividends were a foreign concept to the sector.
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.
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Tom Lydon’s clients own shares of Apple and Facebook.