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3 tech stocks that pay dividends


The phrase “tech stocks that pay dividends” almost sounds like an oxymoron. After all, aren’t most high-growth tech companies burning cash on their way to profitability? This is a common misconception. There are plenty of tech stocks that pay dividends while growing their earnings at a steady pace.

For example, in 2021, 44 of the 76 companies that understand the Technology sector selection index paid a dividend. Regarding the S&P500, there are 197 technology stocks in the index. Of these, 78 pay a dividend.

So that gives me plenty of options to choose from in my quest to find the best tech stocks that pay dividends. The trick is to select three that are still growing. To make the cut, I only selected tech stocks with expected double-digit revenue growth that also have dividend yields of 1% or more.

BBB Reference electronics $28.74
ADI Analog devices $170.13
ADTN Adtran $24.86

Reference Electronics (BHE)

Source: Peshkova / Shutterstock

Reference electronics (NYSE:BBB) provides manufacturing services to companies in eight countries from 23 manufacturing sites. It has been in business since 1979 and is a Fortune 1000 company. As of 2021, the companyRevenue increased 10% to $2.26 billion. Analysts expect growth of 27% this year to $2.86 billion.

Benchmark released its second quarter results earlier this month. Revenue increased 34% year-over-year with strong growth in its IT (73% YoY), Industrial (59% YoY), Medical (53% YoY) segments ) and semiconductor capital (26% YoY) business segments.

Non-GAAP operating margin for the quarter was 3.1%, compared to 2% a year ago. And the company earned 50 cents per share on a non-GAAP basis, up 85% year over year.

“The second quarter continued to demonstrate our ability to execute on our growth strategy despite continued supply chain challenges,” said President and CEO Jeff Benck. “We are pleased with the balanced revenue contribution to our performance in the second quarter, led by the medical, industrial and IT sectors. Meanwhile, our Semi-Cap sector continues to show good growth, with demand signals pointing to strength through 2023.”

BHE stock has risen around 13% over the past year and has a good dividend yield of 2.3%.

Analog Devices (ADI)

Analog Devices (ADI) sign outside building

Source: jejim / Shutterstock.com

Analog devices (NASDAQ:ADI) is by far the most well-known name on this list with the largest market capitalization at $88.4 billion. The company is one of the largest manufacturers of analog and digital signal processing chips in the world.

Analog Devices was launched in 1965 when MIT graduates Ray Stata and Matthew Lorber started making high-performance operational amplifiers. It paid off immediately.

The company took a big step forward by buying out its competitor Maxim Integrated Products for $21 billion in stocks in an agreement reached last year. Maxim designs analog chips for several growing markets, including automotive and data center.

Analog posted record revenue when it released its third-quarter results this week. Sales of $3.1 billion was 77% more than a year earlier. Adjusted earnings per share of $2.52 increased 46.5% year over year.

Of the 27 analysts covering ADI stock, 16 rate it a “buy”, five have listed it as “overweight” and six rate it as a “hold”. No analyst calls it an “underweight” or an outright “sell”.

The average target price is just below $194 per share, representing a 14% increase from current levels. And, of course, there’s the stock’s attractive 1.7% dividend yield.

Adtran (ADTN)

network server room with computers for digital tv ip communications and internet, 3d rendering.  Tech stocks

Source: Connecting the World / Shutterstock.com

Adtran (NASDAQ:ADTN) is a provider of network and communications equipment for voice, data, video and Internet communications for businesses and individuals.

The company got its start in 1986 providing network equipment to Bell’s seven Regional Operating Companies (RBOCs) ceded by AT&T (NYSE:J) as part of its antitrust settlement agreement with the federal government. Today, it is a company with an annualized turnover of more than $618 million.

On July 15, Adtran announcement the completion of its equity merger with ADVA Optical Networking, a European supplier of network equipment for data, storage, voice and video services. Together, the two companies are expected to generate more than $1 billion annual revenue in 2022, up 81% from last year. Adtran shareholders own 54% of the combined company, with ADVA shareholders owning the remainder.

Adtran reported strong second quarter results earlier this month. Revenue increased 20% year over year to $172 million. Meanwhile, operating profit was $8.13 million, up 107% from a year earlier. As ADVA’s earnings come online, quarterly reporting will get even better.

ADTN stock is up 42% since late June and trading near its 52-week high. The stock’s 1.5% yield may hold investors back waiting for a breakout.

As of the date of publication, Will Ashworth had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Will Ashworth has been writing about investing full time since 2008. Publications where he has appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger and many others in the US and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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