Tech stocks that work for you …

About five or six years ago, I started talking about dividend-paying technology companies … and how very few investors even realized that they could get solid (and growing) income streams from the sector.

The reasons I cited back then were pretty simple: Technology firms had been hoarding cash after the Nasdaq bubble popped. The businesses that had survived were maturing and becoming more predictable. Plus, executives recognized that dividends were a great way to entice investors back into their stocks.

Amazingly enough, that trend has accelerated so quickly that information technology companies are now paying more in dividends than any other sector in the S&P 500. Yes, even more than my beloved consumer staples — though just by a hair (14.22 percent vs. 14.21 percent of total index dividends).

All told, 41 of the 71 companies in the benchmark index now make shareholder payments and the average yield is a bit more than 2 percent annually.

What ultimately tipped the scale was Cisco System’s recent dividend hike — the company’s second of the year. But plenty of other recent IT dividend actions have also been big news this year — including Apple’s decision to initiate payments.

These trends naturally ebb and flow. Heck, there was a time back in 2007 when financial companies were contributing 29.12 percent of all the S&P 500 index’s dividends! But still, there’s no denying that tech companies should now be on every income investor’s radar screen.

So Let’s Take a Look at What’s Out There Right Now …

I have already recommended some tech companies in past issues of my Income Superstars newsletter, but this is a great time to survey what other dividend-paying IT firms may be lurking out there.

So I recently conducted a search for any technology company paying more than 1 percent a year in dividends and with a payout ratio under 25 percent.

Click the chart for a larger view.

As you can see from the results, plenty of firms made the cut. That’s pretty darn encouraging, especially when you consider that such low payout ratios mean plenty of room for additional dividend hikes down the road!

Semiconductor companies make up the biggest part of the list. I’m not surprised since semi manufacturers have always been among the technology sector’s dividend leaders.

But there are also plenty of other interesting firms to check out, and I encourage you to do some more research on these names — because as recent developments prove, tech stocks are no longer “buy and just hope” companies … they’re bona fide income stocks.

Best wishes,

Nilus

P.S. Among the names on this list, I found one stock that looked especially attractive … and we recently added it to my dad’s real-life retirement portfolio. To find out more about which stock we bought, and get all my other recommendations, just click here now.