Dividends come with many great perks, with the payouts essentially reflecting a form of ‘payday’ in the market. Technology sector stocks are often overlooked by income-focused investors, as these companies commonly use spare cash to fuel further growth.
But perhaps to the surprise of some, several stocks involved closely in the AI trade –Broadcom (AVGO) , Taiwan Semiconductor (TSM) , and NVIDIA (NVDA)– shell out dividend payments. For those interested in getting paid with some AI exposure, let’s take a closer look at each.
Taiwan Semiconductor’s Critical Role
Taiwan Semiconductor’s critical role in the semiconductor industry has positioned it in an extremely bullish position concerning the AI craze. Shares currently yield 0.7% annually, with TSM also sporting a shareholder-friendly 15.4% five-year annualized dividend growth rate.
TSM’s EPS outlook remains bullish across the board thanks to the favorable environment, helping support continued share momentum.
Image Source: Zacks Investment Research
Broadcom Generates Huge Cash
Broadcom has long been recognized as a strong dividend technology player thanks to its strong cash generation, enabling it to increasingly reward shareholders. The company boasts a sizable 13.1% five-year annualized dividend growth rate, with shares currently yielding 0.6% annually.
For a quick reminder, Broadcom provides custom AI chips and high-speed networking solutions needed to connect massive GPU clusters. Like TSM, Broadcom also sports a bullish EPS outlook across the board thanks to the favorable operating environment, holding a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
NVIDIA Remains King
NVIDIA continues to be the AI favorite thanks to its Data Center results that have shown historically strong growth. Shares currently yield a small 0.02% annually, but its current positioning keeps it as a stock that you can’t ignore, no matter what.
The rich demand backdrop has kept the stock at a favorable Zacks Rank #2 (Buy), with analysts continuing to remain bullish across the board.
Image Source: Zacks Investment Research
Bottom Line
Dividends come with great perks for investors, providing an income stream and the ability to maximize returns through dividend reinvestment.
Although all three dividend-paying tech stocks above – Broadcom (AVGO) , Taiwan Semiconductor (TSM) , and NVIDIA (NVDA) – aren’t high-yield, the bullish EPS outlooks paired with rock-solid growth outlooks can’t be overlooked by income-focused investors looking to obtain some AI exposure.
— Derek Lewis
Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.
Source: Zacks
