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Basically, dividends represent a portion of the company’s profits, which are paid regularly to stockholders. Companies which pay regular and handsome dividends often have a sustainable business model, a long track record of profitability, rising cash flows, good liquidity, strong balance sheets and some value characteristics.
Dividend-paying stocks have proven to be outperformers over the long term and are the safest ways to create wealth. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
In addition to robust yields, most of the dividend paying stocks have generated handsome returns this year. With the help of the Zacks Stock Screener and by combining high dividends, rising earnings estimates, and other valuation criteria, we have handpicked five promising stocks. Not only do these stocks have dividend yields of 3% or more but also carry a Zacks Rank #1 (Strong Buy) or #2 (Buy), indicating the likelihood of upside in shares over the next month or so.
Evolving Systems, Inc. is a leading provider of selected software solutions and services that enable telecommunications carriers to address the technical challenges to their operational support systems. The company develops, markets, sells and supports standard software products that enable established and new telecommunications companies to address local number portability requirements and the impact of LNP on such companies' support systems. The company also provides custom software development services to leading telecommunications companies.
With a market capitalization of $59.58 million, the company offers a promising dividend yield of about 8.7%. Moreover, the stock, which also carries a Zacks Rank #2, has a strong earnings history and is likely to continue to benefit from a solid business model. The company has posted positive earnings surprises in two out of the last four quarters at an average of 33.7% and its expected earnings growth rate over the next five years is 15%.
Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels. In addition, the company is expanding its product offering to include LCD TV chipset solutions and LCOS microdisplays.
This Zacks Rank #2 stock offers a robust dividend yield of 3.1%. The company has consistently increased its dividend over the past several years and performed decently on the earnings front as well. Himax Technologies has surpassed the Zacks Consensus Estimate in two out of the last four quarters at an average of 28.6% and its expected earnings growth rate over the next five years is 22.5%. The company has a market capitalization of $1.62 billion.
Mobile TeleSystems
Mobile TeleSystems’ mission is to build an integrated mobile communications world, which will bring people together, enrich their lives and open up new horizons, both at work and at home. It intends to achieve this end by understanding customers' needs, employing experienced, qualified and highly motivated personnel, introducing new technologies, and enhancing its development.
The company has a dividend yield of 7.9% and carries a Zacks Rank #2. With a market capitalization of $6.69 million, the company has a positive earnings surprise of 2%.
TransAct Technologies, Incorporated designs, develops, manufactures and markets transaction-based printers and related products under the ITHACA and MAGNETEC and TRANSACT.COM brand names. The company's printers are trusted worldwide to provide crisp, clean transaction records from receipts, tickets and coupons, register journal and other documents.
With market capitalization of nearly $55.1 million, the company carries a Zacks Rank #2 and offers a robust dividend yield of 4.4%. The company has performed decently on the earnings front. TransAct Technologies has surpassed our EPS consensus in two out of the last four quarters with an average positive surprise of 18.8%.
Millicom International Cellular
Millicom is a leading international operator of cellular telephony services, primarily in emerging markets where basic telephone service is often inadequate and where economic development and change are creating new demand for communication services. Millicom has sought to establish an early presence in markets with little or no cellular service by applying for cellular licenses, primarily through joint ventures with prominent local business partners.
This Zacks Rank #1 stock offers a robust dividend yield of 4.7%. The company has consistently increased its dividend over the past several years and performed decently on the earnings front as well. The company’s expected earnings growth rate over the next five years is 12%. The stock has a market capitalization of nearly $5.69 billion.
Bottom Line
Investing in these stocks should ensure a steady stream of income that is likely to grow over time. Moreover, consistent earnings growth is likely to translate into capital appreciation.
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5 Tech Stocks with Dividend Yields Over 3%
Basically, dividends represent a portion of the company’s profits, which are paid regularly to stockholders. Companies which pay regular and handsome dividends often have a sustainable business model, a long track record of profitability, rising cash flows, good liquidity, strong balance sheets and some value characteristics.
Dividend-paying stocks have proven to be outperformers over the long term and are the safest ways to create wealth. This is because the companies that pay dividends generally act as a hedge against economic uncertainty and provide downside protection by offering outsized payouts or sizable yields on a regular basis.
In addition to robust yields, most of the dividend paying stocks have generated handsome returns this year. With the help of the Zacks Stock Screener and by combining high dividends, rising earnings estimates, and other valuation criteria, we have handpicked five promising stocks. Not only do these stocks have dividend yields of 3% or more but also carry a Zacks Rank #1 (Strong Buy) or #2 (Buy), indicating the likelihood of upside in shares over the next month or so.
The Picks
Evolving Systems Inc. (EVOL - Free Report)
Evolving Systems, Inc. is a leading provider of selected software solutions and services that enable telecommunications carriers to address the technical challenges to their operational support systems. The company develops, markets, sells and supports standard software products that enable established and new telecommunications companies to address local number portability requirements and the impact of LNP on such companies' support systems. The company also provides custom software development services to leading telecommunications companies.
With a market capitalization of $59.58 million, the company offers a promising dividend yield of about 8.7%. Moreover, the stock, which also carries a Zacks Rank #2, has a strong earnings history and is likely to continue to benefit from a solid business model. The company has posted positive earnings surprises in two out of the last four quarters at an average of 33.7% and its expected earnings growth rate over the next five years is 15%.
Himax Technologies, Inc. (HIMX - Free Report)
Himax Technologies, Inc. designs, develops and markets semiconductors that are critical components of flat panel displays. The company's principal products are display drivers for large-sized TFT-LCD panels, which are used in desktop monitors, notebook computers and televisions, and display drivers for small- and medium-sized TFT-LCD panels. In addition, the company is expanding its product offering to include LCD TV chipset solutions and LCOS microdisplays.
This Zacks Rank #2 stock offers a robust dividend yield of 3.1%. The company has consistently increased its dividend over the past several years and performed decently on the earnings front as well. Himax Technologies has surpassed the Zacks Consensus Estimate in two out of the last four quarters at an average of 28.6% and its expected earnings growth rate over the next five years is 22.5%. The company has a market capitalization of $1.62 billion.
Mobile TeleSystems
Mobile TeleSystems’ mission is to build an integrated mobile communications world, which will bring people together, enrich their lives and open up new horizons, both at work and at home. It intends to achieve this end by understanding customers' needs, employing experienced, qualified and highly motivated personnel, introducing new technologies, and enhancing its development.
The company has a dividend yield of 7.9% and carries a Zacks Rank #2. With a market capitalization of $6.69 million, the company has a positive earnings surprise of 2%.
TransAct Technologies Incorporated (TACT - Free Report)
TransAct Technologies, Incorporated designs, develops, manufactures and markets transaction-based printers and related products under the ITHACA and MAGNETEC and TRANSACT.COM brand names. The company's printers are trusted worldwide to provide crisp, clean transaction records from receipts, tickets and coupons, register journal and other documents.
With market capitalization of nearly $55.1 million, the company carries a Zacks Rank #2 and offers a robust dividend yield of 4.4%. The company has performed decently on the earnings front. TransAct Technologies has surpassed our EPS consensus in two out of the last four quarters with an average positive surprise of 18.8%.
Millicom International Cellular
Millicom is a leading international operator of cellular telephony services, primarily in emerging markets where basic telephone service is often inadequate and where economic development and change are creating new demand for communication services. Millicom has sought to establish an early presence in markets with little or no cellular service by applying for cellular licenses, primarily through joint ventures with prominent local business partners.
This Zacks Rank #1 stock offers a robust dividend yield of 4.7%. The company has consistently increased its dividend over the past several years and performed decently on the earnings front as well. The company’s expected earnings growth rate over the next five years is 12%. The stock has a market capitalization of nearly $5.69 billion.
Bottom Line
Investing in these stocks should ensure a steady stream of income that is likely to grow over time. Moreover, consistent earnings growth is likely to translate into capital appreciation.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>