5 Cheap Tech Stocks to Buy Now

Cheap tech stocks are hard to find, so snatch up these five now

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5 Cheap Tech Stocks to Buy Now

Cheap Tech Stocks: Hewlett-Packard

HPQ1 5 Cheap Tech Stocks to Buy NowP/E: 7.8 based on FY2014 earnings
Dividend Yield: 2.1%
Dividend Payout Ratio: 16% of FY2014 earnings

Hewlett-Packard (HPQ) doubled in 2013, so you may not think it’s one of the cheap tech stocks. However, even after this huge run HPQ still has a forward price-to-earnings ratio of less than 8.

Furthermore, HP sports over $12.1 billion in cash on the books. When you back out the cash, the P/E falls to about 6. That’s crazy cheap!

And despite volatility in recent years, HP is a rock-solid company with operating cash flow topping $11.6 billion in fiscal 2013. HPQ stock pays a nice 2% dividend and has tons of headroom to increase those payouts going forward. And considering the distributions have almost doubled in the past 10 years, it’s clear that dividend growth is a big part of the company’s mission.

Sure, HPQ has had trouble growing revenue in a post-PC age. And there is a risk that some of the turnaround has been priced in after the 2013 run-up.

But HPQ stock is showing signs of a transition to more software and enterprise sales that hold potential. On top of that, it’s still a cheap tech stock based on forward earnings, and the dividend is bulletproof so you will have a good foundation even if shares do drift sideways for the short-term.

As of this writing, Jeff Reeves did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2014/01/5-cheap-tech-stocks-buy-now/.

©2014 InvestorPlace Media, LLC

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