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4 Best Dividend Tech Stocks in the Market Today

Apart from growth stocks, investing in stocks that yield stable dividends is another good way to make money in the market. This is true especially in the current scenario when markets have been volatile, causing investors to panic. Though, of late, markets have embarked on a “correction” course, bouts of occasional volatility still persist.

Macroeconomic Story So Far This Year

After a dismal start to the year, U.S bourses finally made some recovery in March, helped by stabilizing crude prices and FOMC’s change of stance on rate hikes. Encouraging data on manufacturing and sound jobs reports are likely to add to the indices’ good run going ahead. Manufacturing PMI for March was 51.5, a minor increase over February PMI while 215,000 jobs were added in March.

Also, in March, the S&P 500, Dow Jones and NASDAQ Composite index grew 6.6%, 7.1% and 6.8%, respectively. For the first quarter, the S&P 500 and Dow Jones were up 0.8% and 1.5% whereas the NASDAQ Composite ended the quarter in the red, down 2.8%.

However, if we dissect thoroughly the factors that have contributed to the recent gains, we come across a rather bleak picture. This raises questions about the sustenance of the recent gains in the stock markets.

There hasn’t been any miraculous recovery in oil prices, which are currently hovering around $36- $37. However, this represents a 37% gain since mid-February when crude plunged to $27 and sent shockwaves across the world. The upcoming OPEC meet (Apr 17) to consider a supply freeze, weaker-than-expected crude inventories and a fall in U.S rig counts (from 372 to 362 as per Baker Hughes, for the week ending Apr 1) have been providing some cushion to oil prices.

However, yesterday, WTI crude saw a 4% slide after Saudi Arabia said that it might agree to a production freeze only "if all countries” including Iran “agree to freeze production.” Iran has been reluctant to freeze production because it has just returned to exports after a long period of international sanctions (imposed in 2010) and is reportedly on track to increase its production by 1 million barrels of export per day. However, recently, Iran has shown interest to be a part of the meet after being reluctant earlier, but Tehran agreeing on a supply freeze looks a remote possibility.

Adding to crude uncertainty is the slowdown in the Chinese economy and yuan devaluation, which has wreaked havoc on the U.S. indices so far this year causing FOMC to change its stance on rate hikes, allaying lot of investor concern.

FOMC head Janet Yellen in her speech on Mar 29 said that as “global and financial developments continue to pose risks," the Fed isn’t going to hike interest rates four times as projected last December. Instead it will hike rates twice this year. For the time being, interest rates continue to stay between 0.25% and 0.50%.

Fed’s decision to delay rate hikes definitely quells a lot of concern especially when things are not looking that great on the domestic turf as well. GDP estimates for the first quarter have been hovering below 1% as against 1.4% growth seen in the fourth quarter of 2015.

Despite an upsurge in the manufacturing PMI for March, analysts remain wary as a stronger dollar and weak global demand will continue to put pressure on the manufacturing sector. Also, reduction in investments especially in the energy sector does not bode well for the sector’s growth. An unforeseen rise in unemployment rate to 5% from 4.9% recorded in February is keeping economy watchers on the sidelines.

Dividend Stocks – A Safe Haven in Troubled Times?

Since there is underlying weakness in the economy, it will be sensible to play safe by investing in dividend paying stocks. Moreover, the probability of rates not going up as fast as the markets had once assumed has made dividend paying stocks more attractive.

Often, steady dividend paying companies are fundamentally strong with robust cash positions and their stock prices have a tendency to be less volatile compared with growth companies. Risk averse or not, keeping dividend stocks in the portfolio hedges one from the perils that come with growth stocks.

4 Dividend Tech Stocks to Buy Now

We bring you four high dividend paying stocks from one of the hottest sectors-Technology- to maximize your portfolio returns. These stocks carry dividend yields of 2% or more. With the help of the Zacks Stock Screener and by combining high dividends, and value, growth and momentum (VGM) score of “B” or higher, we have handpicked five promising stocks. Not only do these stocks have a high dividend yield but they also sport a Zacks Rank #1 (Strong Buy) or #2 (Buy), indicating the likelihood of an upside in share price over the next month or so.

CenturyLink, Inc. (CTL) is a leading rural local exchange carrier providing a range of telecom services, including local and long distance voice, wholesale network access, high-speed Internet access, managed hosting and collocation services,  and video services. The company is headquartered in Monroe, LA. It has an estimated market cap of over $17.3 billion.

Dividend Yield – 6.71%

Zacks Rank – #1

VGM Score – B

Lexmark International Inc. (LXK) provides complete digital printing solutions including inkjet and laser printers, multi-function products (MFP), photo printers and associated supplies and services for both office and home use. This Lexington, KY based company has a market cap of $2.0 billion.

Dividend Yield – 4.39%

Zacks Rank – #1

VGM Score – B

Windstream Holdings, Inc. (WIN) is one of the largest U.S. rural local exchange carriers (RLEC), primarily operating in rural communities in the southern and southwestern parts of the U.S. Windstream, together with its various subsidiaries, provides local and long distance phone service and high-speed Internet services to residential and business customers across 48 states.  This Little Rock, AR based company has a market cap of $699.8 million.

Dividend Yield – 7.77%

Zacks Rank – #2

VGM Score – B

EarthLink Holdings Corp. (ELNK) – With a market capitalization of $599.6 million, this Atlanta, GA-based IT Services industry stock is engaged in providing IT services and communications to business and residential customers mainly in the U.S.

Dividend Yield – 3.50%

Zacks Rank – #2

VGM Score – A

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 DaysClick to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
EARTHLINK HLDGS (ELNK): Free Stock Analysis Report
 
LEXMARK INTL (LXK): Free Stock Analysis Report
 
CENTURYLINK INC (CTL): Free Stock Analysis Report
 
WINDSTREAM HLDG (WIN): Free Stock Analysis Report
 
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