Become A Dividend King With These 3 Tech Stocks

Investors do not immediately think of dividends when they research tech stocks. Indeed, technology companies are largely associated with having high growth potential, and growth stocks generally don’t offer dividends. Some do, but the payouts are often too small to justify as a reason for buying shares.

Tech corporations which have the potential to significantly increase their cash payouts over time make for valuable investment prospects, even if they do not currently offer an attractive yield. They should be in demand because they have strong potential in giving current shareholders (or shareholders who buy soon) a higher dividend yield than they currently receive.

Here are three tech stocks which have the ability to significantly increase the cash payouts they provide to investors.  Each of them is capable of generating a high level of cash flows, and this is the key reason for why they are able to support higher dividend payments to shareholders.

Applied Materials Inc - (AMAT - Analyst Report)

Applied Materials develops and manufactures semiconductor wafer fabrication equipment and related parts for the global semiconductor industry. Their customers include various manufacturers within the semiconductor space because they are a leader in providing materials engineering solutions for new chips and advanced display. AMAT has a market cap of $27.39 billion. 

This year, Applied Materials’ earnings and sales are projected to grow by 29% and 7.6% respectively. The company is pretty liquid with a current ratio of 2.58, and it also has a capital structure which isn’t too leveraged.Since 2013, AMAT has seen significant sales growth, and this has helped in providing higher gross margin levels for the corporation.

Applied Materials doles out a 1.59% dividend for shareholders, and while this is not very impressive, AMAT’s cash flows definitely are, and this will drive further dividend growth over time for the company. Since 2013, net income has been trending upwards, and this has been a key factor for why the company’s free cash flows have been so impressive in recent history. 

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