3 Dividend Technology Stocks With Yields Of 2.5% And Up

Many technology companies do not pay dividends, as they tend to invest profits back into the growth of the company or use it for acquisitions.

Here's a look at three technology companies with dividend yields greater than 2.5% that could be good picks for investors.

IBM: The dividend yield of International Business Machines Corporation IBM is now above 5.7%. Shares of the tech giant have fallen 15% in 2020.

IBM reported a 3% year-over-year decline in third-quarter revenue to $17.6 billion. The company said its Cloud & Cognitive Software segment had 7% year-over-year growth.

Overall cloud revenue across all IBM business segments was up 19% year-over-year to $6 billion in the third quarter. Over the last 12 months, cloud-related revenue has increased 25% year-over-year to $24.4 billion for the company.

“The strong performance of our cloud business, led by Red Hat, underscores the growing client adoption of our open hybrid cloud platform,” said IBM CEO Arvind Krishna.

The company could be a great play on the increased shift to the cloud during the pandemic. The company said it is well-positioned to “seize the $1-trillion hybrid cloud opportunity.”

IBM pays out a quarterly dividend of $1.63. The company increases this amount for its February payout and could announce a raise during its next quarterly earnings report.

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Cisco Systems: Shares of Cisco Systems Inc CSCO are down over 20% in 2020. The company's dividend yield that is close to 4%.

Third-quarter revenue declined 9% year-over-year for Cisco. The company’s largest division of infrastructure platforms saw quarterly revenue fall 15% year-over-year in the quarter. Security segment revenue was the bright spot, with 6% year-over-year growth.

Software subscriptions represented 74% of software segment revenue in the third quarter.

“We executed well in Q3 in a very challenging environment, delivering strong margins and non-GAAP EPS growth,” said Cisco CFO Kelly Kramer.

The dividend payment for Cisco is typically raised every December. The last dividend increase was a penny, going from 35 to 36 cents. The prior increases were from 26 cents to 29 cents; 29 cents to 33 cents; and 33 cents to 35 cents.

Corning: Shares of Corning Incorporated GLW are up 15% year-to-date, which has brought the dividend yield of shares below 3%.

Corning yields over 2.6% and is likely to raise its dividend with the next quarterly earnings report.

Third-quarter revenue increased 1% year-over-year to $3 billion. The company said all five of its market segments had a strong third quarter.

Corning’s mobile consumer electronics segment could get a strong boost from its relationship with Apple Inc AAPL.

Corning was unveiled as the company behind “ceramic shield” on the new iPhone 12. The ceramic shield is the world’s first transparent, color-free glass ceramic. The technology provides 4x the drop protection of previous iPhone models.

The company is also providing glass vials for COVID-19 vaccine makers as part of Operation Warp Speed. This could be a great growth opportunity for the company after a vaccine is approved.

Corning’s optical communications division is working with Verizon Communications VZ on its 5G rollout.