The Bottom Line
Some investors continue to stay well clear of the entire technology space andregard it as impenetrable and irrational. Given the pervasiveness oftechnology, however, this is a significantly self-limiting view that cuts offone of the most dynamic and powerful engines to modern economies. A bettercompromise, then, might be to simply invest the time in careful research andself-education to invest where the valuations make sense.Top Growth Tech Stocks to WatchSome of the best investments over the past year have been growth tech stocks.A growth tech stock is exactly what it sounds like — the stock of a techcompany that is undergoing rapid growth. Growth tech stocks tend to becomparatively expensive based on valuation metrics, and the companies aren’talways profitable. A growth tech stock is highly valued for the company’sability to grow revenue quickly.Image source: Getty Images.
Top growth tech stocks
There are many growth tech stocks to consider, but the best of the bunch havelong track records of robust growth, impressive profitability, and majorcompetitive advantages. The top growth tech stocks include Amazon(NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA), and Adobe(NASDAQ:ADBE).
How to find tech stocks poised for growth
The two most important factors to consider to help you to identify tech stockspoised for growth are the company’s industry sector and rate of sales growth: * Industry sector: Tech companies in some sectors are growing more rapidly than others. Focus on those companies in industries likely to be much larger in the future, such as e-commerce, cloud computing, and AI. * Rate of sales growth: This metric is an important one to consider when judging the attractiveness of a growth stock. The ability to consistently expand revenues at double-digit rates is critical, especially as a company gets bigger. It’s much easier to increase sales of $10 million by 30% than it is to expand $1 billion of sales by the same percent. The best growth tech stocks maintain rapid growth rates as they scale.Profitability isn’t all that important if you’re looking for the next big techstock. Many tech companies aggressively focus on growing as fast as possible,sacrificing profit for increasing scale. That’s not a bad idea if the customerbase is likely to stick around for the long haul. It makes sense for asubscription software company, for example, to spend heavily to win a customerwho may generate revenue for many years to come.So when it comes to profitability, it’s important that the company’sperformance is at least improving. Gross margin should be rising, and thecompany’s path to turning a profit should be clear and viable.Some growth-focused companies never turn a profit and ultimately turn out tobe poor investments. And, even if you do identify the next top tech stock,remember that pricey growth stocks often have much higher volatility than theS&P 500 (SNPINDEX:^GSPC). Massive, painful declines in stock price are commonwith fast-growing tech stocks, and it can take an iron constitution to endurethose declines without panicking.Growth tech stocks can provide outsized returns over the long term, and thebest growth tech stocks can yield life-changing returns. But choose wisely toavoid the pitfalls that are inherent to growth investing.7 Chinese Tech Stocks to Watch In 2021Chinese tech stocks are made up of both blue-chip companiesâ and growthstocks. Blue-chip stocks are often well-established, stable and provideconsistent profits to investors. These are very useful for portfoliodiversification, as they can help to offset the risk of trading smaller andmore volatile shares, such as penny stocksâ, that may or may not grow to thesame reputable level in the future. Growth stocks are usually funded byventure capital, a form of private financing for small or start-up businessesthat have a high growth potential. Institutional investorsâ such as mutualfunds tend to invest in these companies at an early stage with the aim ofmaking more profits in the long-term.Buying shares in Chinese companies is especially promising in regards to the5G revolution. 5G stocks are a hot topic worldwide, where the generalconsensus is that Chinese tech giant Huawei is the main competitor, along withother US-owned companies including Verizon and Qualcomm. However, for as longas the US-China âtech warâ continues, the US is lacking 5G equipment andideas, allowing China to overtake in the race for new technology. Read ourarticle on the best 5G stocks to watchâ.America’s 25 Fastest-Growing Tech CompaniesEvery annual release of Forbes’ 25 Fastest Growing Technology Companies inAmerica includes a revisit of the prior year’s list to see how it performedagainst the market. While the pace may have slowed, the stock market recoverycontinued. From March 12, 2010, through Feb. 2, 2011, companies on the Nasdaq100 Technology Sector Index were up 27%; companies on the S&P 500 lagged farbehind, but still registered a 13% increase. Our fast-growing techs crushedboth indexes, gaining 44% overall, or 34% excluding acquisitions.Our record of besting the broader market remains intact for the eighthconsecutive year.Last year’s Fast Tech class has been a good hunting ground for acquisitiontargets. Hewlett-Packard snapped up security software firm ArcSight andenterprise-level utility storage company 3Par during a 2010 buying spree. In ahighly publicized bidding war, HP and Dell drove 3Par’s price up 235% to$32.98 by late September, resulting in the largest increase of all 25companies. ArcSight increased 62% over the same time span. Credit card andpayment company Visa made the third acquisition from our list when it boughtelectronic payment processor CyberSource (up 38%) for $2 billion in cashlast July.In Pictures: Top 10 Fastest-Growing Tech CompaniesShares of Riverbed Technology , which optimizes IT network and applicationperformance, made the largest advance of the non-acquired businesses,increasing 156% to $35.65. The company also offers cloud computing services,something it has in common with trailing top performers Fortinet, up 139%, andSalesforce, up 78%.Only seven stocks lost ground. NCI, an IT service provider for the federalgovernment, was the worst offering on the fastest-growing tech list decreasing28% over our tracking period. The biotechnology sector was the thread linkingfour underperformers, including Myriad Genetics and Gilead Sciences , down19% and 17%, respectively.To find the current crop of fastest-growing techs, we combed over 5,000technology companies, looking for minimum sales of $25 million and salesgrowth of at least 10% over the latest 12 months. We also required medianlong-term (three-to-five year) earnings-per-share growth estimates to begreater than 10%. Finally, we ranked companies on their five-year salesgrowth, which needed to be in double-digit territory for each year.Our filtering criteria did not end there. Using detailed scoring data fromAudit Integrity, a global governance ratings and research firm (now part ofGovernanceMetrics International) we disqualified companies with significantlegal concerns, or possible accounting or governance issues. There were moresubjective barriers to consider as well, including, but not limited to,information from analysts’ reports and other third-party sources.The 2010 Fast Tech class had the lowest year-to-year turnover since theinception of the list in 2003. Only six companies fell off to make room fornew blood, and one of them is not a true newcomer. CommVault Systemsqualified for the 2008 and 2009 rankings, but failed to do so last year.The five new names are probably not ones that the average investor knows, butperhaps should; four debuted in the top 10. The Chicago-based Neutral Tandemplaced second overall with a sales growth rate of 100% every year for the pastfive years. The company enables broadband providers to exchange data betweentheir respective networks. ViroPharma , the pharmaceutical developer ofCinryze and the antibiotic Vanocin, is sixth, having maintained a sales growthrate of 55% over the same time period.Rackspace Hosting, (No. 7, 51% sales growth), SolarWinds (No. 10, 43% salesgrowth) an IT company that has little to do with renewable energy, and CubistPharmaceuticals (No. 14, 41% sales growth), round out the freshmen.In Pictures: Top 10 Fastest-Growing Tech Companies* * *2010 Forbes Fast Tech List Rank | Company Name | Business | Closing Price (2/2/2011) | Est. Long-Term EPSGrowth (%) | LTM Sales ($Mil) | 5-Year Sales Growth (%) —|—|—|—|—|—|— 1 |
Cognizant Technology Solutions
| Computer Programming Services | 76.16 | 20 | 4,185 | 43 12 |
Cognizant Technology Solutions
| Computer Programming Services | 76.16 | 20 | 4,185 | 43 12 |
| Motion Picture Audio Technology | 60.26 | 16 | 923 | 23 Prices as of 2/2/11 5-Year sales growth, annualized. Estimated Long-Term EPS Growth: Annualized, projected over next three to fiveyears.Tech dividend stocks list
Tech Dividend Stocks in a Nutshell
* Tech companies are generally known for their exponential growth potential. * With great potential comes great volatility. * However, “old techs” show strong core businesses and significant cash flows. * Here’s the tech dividend stocks list.Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Alphabet (GOOG) form what wecall the FANG stocks on the stock market. Those tech stocks don’t paydividends, and they are rapidly growing. This is usually the image we have oftech stocks; young kids in their garage achieving their billionaire statusbefore they turn 30. No so much for income seeking investors, though.There is now a whole universe of “old techs” that have built a solid corebusiness and have now agreed to share their bank account with theirshareholders. Several well-known companies such as Analog Devices (ADI), Intel(INTC) and Microsoft (MSFT) have been paying dividends for over a decade. Theyshow the perfect balance between growth potential and a solid core businessenabling dividend payments.This article explores this sector, defines how it can boost the yields in yourportfolio, and provides you with a complete dividend stock lists includingcomprehensive metrics.
1 Companies with disruptive technology entering various fields such as retail
(Amazon), Television (Netflix), Financials (Robinhood) or accommodation(Airbnb). Those companies are fighting for market share and they are rapidlygrowing. They are not interested in paying dividends.
2 Companies that were once growing rapidly through technology breakthroughs,
but have grown-up. Those are “adult” tech stocks that are well established intheir respective markets. Since it’s in their DNA to develop new technology,they are still manifesting several growth vectors.At Dividend Stocks Rock, we are interested in the later. Older tech stockshave developed new markets that are relatively mature now. We can think ofMicrosoft and Intel that were at the very beginning of the PC era. Now thatconsumers are shifting toward smartphones and tablets, PC sales are slowingdown. However, both companies still enjoy strong cash flow generation fromtheir PC related activities. At the same time, they have also developed othertechnology (cloud, big data, data center, etc.) that enables them to posthigh-single digit to double-digit revenue growth.The number of techs now paying dividends for at least 5 years is rapidlygrowing, and there are enough companies to make a full list now.
What Tech Stocks Can Do For Dividend Investors?
It is usually rare to find tech stocks with a high yield. If you are lookingfor tech stock with a 6% yield, you will not find them on our list. We usethis sector to boost our portfolio value appreciation while supporting aminimum level of income. The list contains mostly companies showing a 1.50% to3% dividend with a few exceptions over those levels.What is more interesting about tech stocks is their dividend growth potential.While yield is low, you will find many double-digit dividend growers.Therefore, you can expect your dividends to grow rapidly.Tech dividend stocks are for investors looking for both stock appreciation andstrong dividend growth.
Tech Dividend Stocks List
Below you will find the Tech Dividend Stock list. We’ve published a shortversion as a table on this page, but you can download the full versionincluding several metrics right here:Symbol| Name| Yield| Rev 5yr| EPS 5yr| Div 5yr —|—|—|—|—|— ACN| Accenture PLC| 1.65%| 6.48%| 6.55%| 10.43% ADI| Analog Devices Inc| 2.20%| 13.59%| 0.39%| 9.01% AMAT| Applied Materials Inc| 1.73%| 10.76%| 66.31%| 3.30% AVGO| Broadcom Inc| 2.94%| 49.47%| 17.47%| 48.76% DOX| Amdocs Ltd| 1.54%| 3.56%| 5.61%| 45.75% GRMN| Garmin Ltd| 2.49%| 2.60%| 5.92%| 3.11% INFY| Infosys Ltd| 4.00%| 8.14%| 8.34%| 21.52% JCOM| j2 Global Inc| 2.18%| 24.65%| 1.63%| 11.81% KLAC| KLA-Tencor Corp| 2.88%| 7.26%| 9.76%| 9.51% MAXR.TO| Maxar Technologies Ltd| 3.77%| 19.07%| 15.93%| 2.69% MXIM| Maxim Integrated Products Inc| 3.13%| 0.31%| 0.99%| 10.20% OTEX| Open Text Corp| 1.62%| 15.61%| 6.19%| 48.84% OTEX.TO| Open Text Corp| 1.61%| 21.18%| 11.31%| 56.01% RELL| Richardson Electronics Ltd| 2.98%| 2.96%| 25.09%| 0.00% TSM| Taiwan Semiconductor Manufacturing Co Ltd| 3.36%| 13.40%| 15.65%| 18.35% TXN| Texas Instruments Inc| 2.43%| 3.13%| 13.93%| 24.11% WSO| Watsco Inc| 3.34%| 4.82%| 16.56%| 13.15% WSO.B| Watsco Inc| 3.40%| 4.82%| 16.56%| 13.15% XLNX| Xilinx Inc| 1.80%| 3.20%| 2.14%| 9.73% This table is updated once a year, but we have an updated stocks list withadditional metrics for you to download:Download the Free DSR Dividend Stocks ListHere are the metrics I’ve used to build the Tech list: * Dividend yield between 1.5% and 10% (I want stocks that pay dividend) * 5-year revenue growth positive (I want growing businesses in my portfolio) * 5-year normalized diluted EPS growth positive (growing earnings leads to more dividend growth) * 5-year dividend growth positive (I want management committed to make me richer) * 3-year dividend growth positive (management must not sleep on the job) * Payout ratio under 100% (I want those dividends to keep coming)The Tech Dividend Stocks list is being updated on a quarterly basis.
Tech Dividend Stocks of Interest
At Dividend Stocks Rock, we have included some tech stocks in our dividendportfolios. Here’s a short list of companies that are interesting buysaccording to our current research:Microsoft (MSFT)Founded in 1975 on the premise of offering the best computer operating systemwith a graphical user interface, Microsoft is now in 190 countries. The “MorePersonal Computing” segment includes Windows, Surface, and gaming division.The “Productivity and Business Process” includes the Office suites, Dynamicsproducts, and cloud services along with their latest acquisition: LinkedIn.Finally, the “Intelligent Cloud” segment includes server products and cloudservices (led by the fast-growing Azure) and enterprise services.Texas Instruments (TXN)Texas Instruments is the world’s largest analog chipmaker and a key supplierof embedded chips into a host of applications. For those who don’t know,analog chips are like translators; they convert real-world signals such assound and temperature into digital signals that have the potential to beprocessed. The company is present in various segments with a strong focus onindustrial and automotive sectors. The “other” segment now includes its famouscalculators.Open Text (OTEX or OTEX.TO)Imagine a big business that employs 100 people and keeps growing. Each day,tons of information is collected about products, sales, employees, expenses,contracts, etc. This information is piling up in mountains of unreadablereports. It needs a solution to receive, integrate and digest this data. Thisis called an Enterprise Information Management (EIM) system. EIM helpsmanagers make better decisions by organizing the information to access itrapidly, understand it and trust it. OTEX is a leader in the industry andCanada’s largest one. It helps over 100,000 customers to share, store,retrieve and analyze their company’s information.Cisco (CSCO)Cisco is the reference for switches and routers across the world. The way wetransfer data throughout networks has been a pillar for many industries overthe past decade. While 2/3 of CSCO revenue comes from switches and routers,the rest of CSCO sales come from faster-growing adjacent market segments suchas wireless, security, collaboration, unified communications, and data centerproducts.On top of providing sector lists, we also provide stock cards for each companywe follow. Here’s an example (click on the image to enlarge).*Stock cards are updated twice a year, this is an example that is not being updated
Other DSR Dividend Stocks Lists
If you liked the tech dividend stocks list, but you are looking for additionalsectors, you can register for our free newsletter and receive exclusive accessto all our sector dividend stock lists. For each industry, we cover both U.S.and Canadian dividend stocks.Download the Free DSR Dividend Stocks List7 Cheap Tech Stocks to Watch in 2021The technology sector has played a leading role in powering the market’s gainsover the past couple of decades, and buying and holding cheap tech stocks canlead to life-changing returns. New hardware, software, and services in thespace have helped to drive changes in business and everyday life, and tech’sability to shape and influence nearly every industry under the sun means thesector remains one of the best starting places for investors seeking biggains.
Cheap tech stocks to watch
Growth-dependent valuations and lofty expectations can make it challenging tofind great deals on tech stocks, but it’s still possible to find attractivelyvalued companies that are primed to deliver market-crushing gains. These areseven cheap tech stocks that could deliver strong returns and are worth addingto your portfolio:1. Lumen Technologies (NYSE:LUMN)2. Ubisoft (OTC:UBSFY)3. Baozun (NASDAQ:BZUN)4. Verizon Communications (NYSE:VZ)5. AT&T (NYSE:T)6. Facebook (NASDAQ:FB)7. ContextLogic (NASDAQ:WISH)
CenturyLink changed its name to Lumen Technologies as part of a broader effortto refocus its business and has been making progress under its new banner.However, the stock remains cheaply valued and offers attractivecharacteristics for investors seeking big dividends and strong value. Thetelecommunications business still has avenues for growth, and the stock tradesat a non-prohibitive price-to-earnings (P/E) multiple and has one of thebiggest dividend yields among reasonably stable companies in the sector.Lumen is pivoting its core business from copper-based broadband services tohigh-performance fiber lines, which have a stronger demand outlook in the ageof next-generation internet technologies, and it should generate attractivemargins. The company is also leveraging its position in enterprise internetservices to explore growth opportunities in edge computing, cybersecurity, andcollaboration software. Lumen offers a dividend yield that’s tough to beat,and the cheaply valued stock could deliver big gains if the company’sturnaround effort continues to succeed.