Chasing dividend yields can be expensive. It takes skill, constant attention, and sometimes even dumb luck. Income investing becomes even harder when war, economic uncertainty, and other headwinds affect the future of many companies, especially in the tech industry, where investors are often quick to move on when a company falls short of expectations.
That is where the strong dividend growers stand out. These are the companies that consistently raise their payouts and do so at an impressive rate, giving investors more than exposure to growth.
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But finding these gems can be difficult, especially in an industry that’s not exactly known for generous shareholder payouts.
Thankfully, there are simpler ways to find tech stocks with growing dividend payouts. Let me show you one of them.
How I came up with these stocks
Using Barchart’s Stock Screener, I selected the following filters to build my list:
I set these filters, hit results, and got three companies. I then arranged them by highest dividend yield.
So let’s start with the first dividend growth tech stock:
NetEase Inc ADR (NTES)
NetEase Inc. is one of China’s internet heavyweights, offering digital content and services across gaming, music, and education, with online games at the core of its business. Its broad portfolio allows it to move quickly with digital trends and keep users engaged. As a result, revenue tends to be more resilient than most digital content companies.
The company has a five-year dividend growth of 161.21%, the highest in this list. And today, it pays a forward annual dividend of $2.87, translating to a yield of around 2.3%.
Despite its impressive five-year dividend growth, the payout ratio remains modest at 39%, leaving the company with room for reinvestment and, of course, potential dividend increases.
Further, a consensus among 19 analysts rates the stock a “Strong Buy,” and its mean-to-high target prices suggest between 30% and 49% upside over the next year.
Analog Devices (ADI)
The next dividend tech stock is Analog Devices, a semiconductor titan. Its technology powers factory equipment, medical devices, and even BMW’s future vehicles, giving the company a major market foothold with its integration across various industries.
Analog Devices pays its shareholders $4.40 annually, which translates to a yield of around 1.2%, and has a payout ratio of 40.93%, suggesting a decent balance between reinvestment and shareholder rewards. It has also increased its dividends by 62% in the last five years.
Meanwhile, a consensus among 31 analysts rates the stock a “Strong Buy,” with a potential upside of between 22% and 48% over the next year.
Broadcom (AVGO)
Last but not least we have Broadcom, another semiconductor powerhouse, but chips are only half its story. Broadcom’s AI and networking technology is deeply embedded in modern data centers, helping form the backbone of the systems that keep businesses running.
As for dividends, it pays $2.60 yearly, which translates to a yield of around 0.6%. It also increased its payouts by 81% over the past five years, which is made all the more impressive because the company’s dividend payout ratio is at a healthy 35%.
A consensus among 41 analysts rates the stock a “Strong Buy.” Meanwhile, its mean-to-high target prices suggest an upside of 35% to 76% over the next year.
Final thoughts
The technological boom has presented a generational opportunity for many investors. However, chasing growth shouldn’t come at the expense of generating stable income.
NetEase, Analog Devices, and Broadcom may not have the flashiest stories or generate groundbreaking headlines - but they have consistently and quietly made significant progress. More importantly, they show that payouts can grow while keeping ratios in check.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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