by James Brumley | January 21, 2014 12:54 pm
Investors seeking dividend yield tend to look for stocks within a sector like utilities or financials. After all, these areas have historically been the best payers, and their business models lend themselves to reliable cash distributions.
Income seekers don’t have to limit themselves to the obvious and typical dividend-paying industries, however — every industry has at least a handful of dividend stocks with healthy yields, including the technology sector.
To wit, here are five tech stocks with jaw-dropping dividend yields that even the most nervous of dividend lovers can feel comfortable owning.
GA Dividend Yield: 4.2%
This tech stock might not be a consistent payer, but what Giant Interactive Group (GA) lacks in consistency, it makes up for in the sheer size of its payout. The trailing 12-month dividend yield for GA stock is a healthy 4.2%.
Giant Interactive is a designer and publisher of online video games. Some of its titles include The Golden Land, ZT Online and Dragon Soul. Although GA stock might not drive revenue as reliably as, say a REIT, the nature of the online gaming business lends itself to repeat paying customers that allow for relatively consistent top and bottom lines.
Revenue was up 8.6% last quarter, and earnings for GA stock grew by 14.1% in Q3 2013.
STM Dividend Yield: 5.1%
It’s possible you own a product with an STMicroelectronics NV (STM) component already in it. The company makes semiconductors and microchips, but that description doesn’t do STM justice. STMicroelectronics makes high-performance hardware, like motion sensors used in many tablets and smartphones, and a satellite-location chip for use in handheld devices with geographical-locating capability.
And yes, the company is a supplier for Apple’s (AAPL) iPhone.
But those aren’t the only reasons an investor would want to own STM stock. What’s also compelling about STMicroelectronics is the fact that shareholders are collecting a 5.2% dividend yield annually on a 10-cent quarterly payout.
JCS Dividend Yield: 5.5%
While it scores zero points for the creativity of its moniker, Communications Systems (JCS) scores big points with shareholders for its regular income distribution. JCS stock has paid a dividend every quarter for more than two decades. Better still, Communications Systems has ramped up its dividend payout every year for the past 10, and now yields an impressive dividend yield of 5.5%.
How does a technology company afford to be that reliable and generous?
Simple: Communications Systems makes the hardware needed to build broadband-based networks. It’s not particularly high-brow stuff, but it’s certainly marketable in any environment.
One important thing to note, however, if you’re going hunting for dividend yield in JCS — it’s an extremely low-volume stock, at just more than 10,000 shares changing hands daily. In other words, bid-ask spreads aren’t necessarily going to be the best, so use limit orders and stop-losses when dealing with JCS stock.
CCUR Dividend Yield: 6%
Ever wonder who tackles the massive job of sending hundreds of different television programming choices to millions of different cable subscribers?
For that matter, have you ever wondered how video-on-demand works?
Contrary to popular belief, it’s not your cable company directing all the digital traffic involved in providing a cable television service. It’s Concurrent Computer (CCUR), and clearly the company fills a need that’s not going away anytime soon.
That perpetual demand isn’t the only reason an investor might want to own shares of CCUR stock, however. No, the reason income investors should be interested in Concurrent Computer is its dividend yield of 6%. Again, though, note the low volume at just 50,000 shares traded daily, and tread carefully.
MNDO Dividend Yield: 11.2%
Don’t sweat it if you’ve never heard of Mind C.T.I. Ltd. (MNDO); most people haven’t. The tiny company doesn’t really do anything that would put it in the limelight. Rather, the company simply provides billing and customer care solutions for the telecom industry.
Boring? You bet. What’s not boring, however, is the big yield MNDO stock owners pocketed in 2013 — a 24-cent payment that would translate into a 11.2% yield on current prices.
One thing worth noting: Mind C.T.I. doesn’t pay a quarterly dividend. It only makes a cash payout once per year, right after it files its fiscal full-year reports. It has paid this dividend religiously for a decade, however, and more than that, the dividend on MNDO stock has grown pretty reliably during that 10-year stretch. In 2003, the payout was 14 cents per share, but reached 24 cents per share by last year.
And lastly, MNDO also trades on low volume of just more than 40,000 shares per day.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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