The Internet of Things (IoT) has the potential to enable huge efficiency improvements by analyzing the data generated by connecting the world's devices. In fact, the trend is already having a big impact on the tech sector and related stocks. For income-oriented investors, there are some major IoT players that are worth considering as portfolio additions.
Click through the slideshow below for profiles on Cisco (CSCO -0.19%), IBM (IBM 0.40%), Qualcomm (QCOM 0.81%), Verizon (VZ 0.60%), and AT&T (T 1.39%). The presentation looks at these companies shaping the future of the IoT based on the five most important metrics that dividend investors should keep their eyes on:
- Dividend yield: annual payout as a percentage of share price -- shows how much income is generated per dollar invested
- Years of dividend growth: how many years running a company has raised its payout -- helpful in estimating the likelihood of payout increases
- Payout ratio: dividend payout as a percentage of earnings -- indicates payout sustainability and room for growth
- Dividend growth: amount that payout has increased over a time period -- helpful in estimating the extent of future payout increases
- Free cash flow: operating cash flow minus capital expenditures -- dividends are often paid from free cash flow and cash generation is an indicator of ability to maintain and raise payout