OWhen the topic of dividends comes up, people don’t often think of tech stocks. But that could be a mistake. Not only do some tech stocks pay a dividend, but some also increase the payout in addition to buying back shares. Those who can do this while executing a great strategy can produce fantastic returns for shareholders.
Apple (NASDAQ:AAPL), Microsoft (NASDAQ: MSFT) and Accenture (NYSE:ACN) check all these boxes. And stocks have returned 352%, 210% and 144% respectively since the start of 2019. It’s still not too late to buy stocks. Here’s why.
Apple products are everywhere. The iOS mobile operating system for its iPhones has 58% market share in the United States and 28% worldwide. Sales reached $378 billion in the past 12 months. The company’s high-margin service offerings continue to account for a larger portion of that revenue. Even his streaming service – a small player in the industry – just won a Best Picture Oscar at last week’s Oscars. It’s an amazing business. But there is another reason to be excited.
As its products are increasingly adopted for personal use, these customers want the same experience at work. And companies give in. A 2020 survey of 1,000 IT professionals by Parallels found that 55% of companies support Apple devices and 30% allow their employees to choose between a Mac and a Microsoft Windows device. This shows up in the global market share data. And it can become a steady source of income, potentially shielding the stock from a slowdown in consumer spending.
Apple also pays a dividend of $0.22 per quarter. The 0.5% return might not be much. But the company will pay nearly twice as much per share as it did in 2014. It has also repurchased nearly a third of outstanding shares during this period. All things considered, it’s a company with clear tailwinds regardless of how the stock price moves in the short term.
Apple could be making headway in the office. But Microsoft is not sitting on its hands. And he has his own path of growth to pursue. The company once known almost exclusively for productivity software has morphed into a diverse technology conglomerate. Its $185 billion in revenue over the last 12 months is split roughly evenly across its three business segments.
The Productivity and Business Processes segment is a basket of business-focused products and services, including office suite of applications, LinkedIn, and enterprise resource planning (ERP) and workforce management tools. cloud-based customer relations (CRM). The intelligent cloud unit consists of servers and cloud services that power a company’s back-end. But more personal computing – the third segment – is where management has been making noise.
It includes the ubiquitous Windows software. But it also houses devices and games. This is where Microsoft’s Xbox console and its Game Pass subscription business have been getting a lot of investors excited lately.
In Proposed $69 Billion Deal, Company Buys Video Game Developer ActivisionBlizzard. Unless regulators block it, the deal will add popular games like Call of Duty to its Xbox Game Pass subscription service. It will also make Microsoft the third-largest video game company by revenue and the largest by the size of its studio portfolio.
To top it off, Microsoft is paying a dividend of $0.62 per share. As for Apple, the 0.8% return isn’t much. But it has more than doubled since 2014 while taking 10% off the stock. Having multiple steady streams of income and a respectable yield makes this dividend payer something to buy and hold for the long term.
Accenture may not be a household name like Apple and Microsoft, but the world’s largest companies depend on it to meet their digital transformation and outsourcing needs. From Fortune 100 companies, it has 92 as customers. Three quarters of Fortune Global 500 are customers. And of the company’s top 100 customers, 98 have been with them for more than a decade.
Success in building lasting relationships with his clients has produced financial stability. Accenture has doubled its dividend since 2014 – the yield stands at 1.14% – and more than doubled its free cash flow over the same period.
In mid-2019, Accenture named its head of North America, Julie Sweet, as CEO. She ably led the business through the pandemic and oversaw revenue growth across all industry groups and geographies in 2021. Trailing 12-month sales are 31% higher than pre-pandemic fiscal year ending in August 2019.
The achievements have not gone unnoticed. The stock is up 74% since Sweet took over, easily outpacing the S&P500, and last fall she was chosen to chair the board of directors. It really is his company now. And if the past few years are any indication, shareholders are in good hands.
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Jason Hawthorne owns Microsoft. The Motley Fool owns and recommends Accenture, Apple and Microsoft. The Motley Fool recommends the following options: $120 long calls in March 2023 on Apple and short calls $130 in March 2023 on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.