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Tech stocks have not usually been associated with dividends. Rather, the technology sector is more closely linked to growth stocks than it is known for dividend stocks. But this is starting to change. Many tech stocks have initiated dividends in the past decade, while there are also tech stocks that pay dividends well above the market average.

With the average S&P 500 stock yielding just 1.7% right now, investors can find tech dividend stocks with yields of 3% or more. This article will discuss 3 tech stocks that combine growth and dividends.

NetApp (NTAP)

NetApp calls itself the “data authority for hybrid cloud” providing services to simplify and empower a company’s use of its data, as well as accelerate their digital transformation. The company generated over $6.3 billion in sales last fiscal year and earned $1.21 billion in adjusted net income.

On February 22nd, 2023, NetApp reported Q3 fiscal year 2023 results for the period ending January 27th, 2023. For the quarter, the company generated net revenues of $1.53 billion, down 5% year-over-year. Adjusted net income equaled $301 million or $1.37 per share compared to $330 million or $1.44 per share in the third quarter of FY 2022. Of note, NetApp’s Public Cloud annualized revenue run rate grew 29% year-over-year to $605 million, and the All-flash array annualized net revenue run rate decreased 12% year-over-year to $2.8 billion.

In the third quarter, the company returned $308 million to shareholders in share repurchases and dividends. The company also introduced new products, such as BlueXP, a unified control plane for hybrid multicloud environments, as well as a new version of NetApp ONTAP, with stronger protection capabilities to ward against ransomware attacks. In addition, NetApp also provided Q4 and FY fiscal 2023 guidance. For the upcoming quarter the company expects $1.30 to $1.40 in adjusted earnings-per share. For the year, NetApp maintained guidance and expects adjusted earnings-per-share of $5.30 to $5.50.

NetApp initiated its dividend in 2013 and has since grown it tremendously. In 2018, NetApp doubled its dividend and in 2019 the payout was increased by 20%, followed by small increases in 2021 and 2022. With a dividend payout ratio below 40%, the dividend is very safe. Shares currently yield 3.1%.

Juniper Networks (JNPR)

Juniper Networks aims to solve the world’s most difficult problems in networking technology through its products, solutions and services which connect the globe. Juniper designs, develops, and sells switching, routing, security, software products and services for the networking industry. JNPR sells its solutions in more than 150 countries. Juniper’s customers include the world’s biggest wired and wireless carriers, content and internet service providers, cloud and data center providers, cable and satellite operators, major banks and financial institutions, government agencies, healthcare and educational institutions, and energy and utility companies. In 2022, the company earned $5.3 billion in revenue.

Juniper Networks reported first quarter 2023 results on April 25th, 2023. Net revenues for the quarter were $1.37 billion, up 17% year-over-year. GAAP net income for the quarter was $0.26 per share, a 53% increase over $0.17 in the same prior year period. Non-GAAP net income was $0.48 per share, a 55% increase over $0.31 in the first quarter 2022. The company repurchased $151 million of common stock for retirement in Q1 2023. Total cash, cash equivalents and investments were $1.2 billion at quarter-end. Leadership has provided guidance for second quarter 2023 results. The company is expecting revenue of $1.41 billion for the second quarter, and non-GAAP net income per share of roughly $0.54.

The company has many growth drivers and tailwinds in the business. The Enterprise business is expected to grow at double-digits and is recognized as a market leader in multiple use cases for Artificial Intelligence. The company will expand their automated WAN services into high-growth 5G-ready Metro markets. The Cloud Provider segment is also expected to grow at double digits year-over-year.

JNPR has a projected dividend payout ratio of 37% for 2023. Today the dividend payout is fairly safe, and we see room for growth, but the payout ratio is quickly increasing so we expect growth will slow. Shares currently yield 3.1%.

Fidelity National Information Services (FIS)

Fidelity National Information Services, Inc. is a provider of financial technology services for merchants, banks, and capital markets businesses. FIS offers technology solutions for retail and institutional banking, payments, asset and wealth management, risk and compliance, payment processing, consulting, and outsourcing. The company has a history of making strategic acquisitions and forming partnerships, such as the recent acquisition of Payrix Holdings, which specializes in embedding and monetizing payments.

Through acquisition the company can diversify its revenue streams and expand its reach into new markets. It also focuses on global expansion under FIS and Worldpay brands, particularly in key markets such as Europe, Asia, and Latin America. FIS is committed to providing competitive customer service and customized solutions in embedded finance, B2B payments, lending and money movement, intelligent data, and crypto.

On February 13th, the company announced results for the fourth quarter ending December 31st, 2022. FIS reported Q4 Non-GAAP EPS of $1.71, beating market estimates by $0.01. The company reported revenues of $3.71 billion for the quarter, up 1.1% year-over-year. Looking forward, the management expects a continued macroeconomic deterioration in the UK and a US recession, but the company’s strategic goals is to achieve a normalized revenue growth in the range of 4-6% in 2023.

FIS dividend history shows a consistent increase in DPS, and in 2022, the cash dividends rose to $1.88 per share, a YoY increase of 20.5%. The 2023 dividend payout ratio is expected at 42%, indicating a safe dividend. The stock has a 3.9% dividend yield.

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