While growth-oriented technology names may not be synonymous with yields, income seekers can still find attractive payouts through a targeted tech sector-related dividend ETF.

Over the past decade, the technology sector has increased dividend payments by about 17% to $88 billion, CNBC reports.

“With a scarcity of yield today, investors may be well-served to look to the tech sector for both dividend yield and dividend growth,” Credit Suisse analyst John Talbott said in a note. “Many firms in the space offer decent dividend yields and the ability to grow dividends further given their high sustainable growth rates.”

Technology companies historically did not pay out dividends since it would hint that the firm didn’t have anything new to reinvest in to further support their breakneck growth. While this growth-oriented model has worked over the years, the market environment has shifted.

“Over time, that has shifted,” Paul Meeks, portfolio manager at Wireless Fund (WIREX) & Independent Solutions Wealth Management, told CNBC. “There are now a group of tech investors…that are not just looking for the go, go, go, growth. Now it’s not necessarily a real black eye if you pay a dividend with a portion of your cash flow.”

In a time when yields on benchmark 10-year Treasury notes have dipped to their lowest levels in three years and major economies around the world see yields slid into the negative territory, more investors are looking for ways to enhance their portfolios with more attractive yield-generating ideas. Consequently, some have turned to the technology segment.

“Tech dividend yield plus buyback yield is really only second to financials,” Keith Parker, global market strategist at UBS told CNBC. “So you have that high yield plus growth, so there is lots of pockets of value plus growth where you can ride out the market volatility against a backdrop of slowing growth and another round of tariffs coming on board in September.”

Income-minded investors can also target tech names with attractive payouts through something like the First Trust NASDAQ Technology Dividend Index Fund (NasdaqGS: TDIV) to play that theme. TDIV shows a 2.38% 12-month yield.

The First Trust NASDAQ Technology Dividend Index Fund screens for technology names that have paid a regular or common dividend within the past 12 months, have a yield of at least 0.5% and have not had a decrease in common dividends per share paid within past 12 months. The underlying index also employs a modified dividend value weighting methodology where technology securities are given a collective weight of 80% and the telecommunications securities are given a collective weight of 20% in the index.

For more information on the tech sector, visit our technology category.

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