Investors could get whiplash watching the stock market collapse last year, then quickly rebound to regain all the lost ground and go on to set new record highs.
It took the S&P 500 less than three months to make up the dramatic deficit it incurred at the start of the pandemic, and it has since gone on to gain another 45% since then. In short, from trough to peak the broad market index has doubled in value in less than 18 months.
In periods of extreme market volatility such as the one we've just gone through, one constant that investors can count on is the reliability of dividend stocks to see them through. The asset managers at Hartford Funds found that over a 90-year period going all the way back to 1930, dividend-paying stocks contributed 41% to the total return of the benchmark S&P 500 index. Through wars, recessions, depressions, market crashes, and "lost decades," dividends were the driving force behind the stock market's superior gains.
Since 1970, however, dividends have represented an amazing 84% of the index's total return.
Yet investors shouldn't just chase yield, as a higher yield typically means the stock carries a higher risk. That's why the following pair of safe dividend tech stocks should be on everyone's radar to buy.
Despite rapidly expanding into a leadership position in artificial intelligence, data centers, and automobiles, all areas where there is considerable overlap, Nvidia (NASDAQ:NVDA) is best known for its graphics cards, which make processing-intensive video games possible.
Graphics processing units, or GPUs, were responsible for 47% of the $6.5 billion in total revenue Nvidia generated in the second quarter, while gaming itself generated $10.5 billion in revenue over the last four quarters. That's almost half of the tech stock's entire business for the past year.
But cryptocurrencies and mining present a new space that holds considerable potential for Nvidia to dominate simply because of the strength and speed of its processors. Its dedicated GPU for professional cryptocurrency mining applications, the Nvidia CMP HX, was specifically designed to optimize mining operations by taking advantage of its superior processing capabilities to allow a larger number of GPUs to be controlled by a single central processing unit (CPU).
Wall Street forecasts the chipmaker will grow revenue from $16.5 billion in 2021 to $51 billion in 2026, a better-than-25% compound annual growth rate. Earnings are expected to grow even faster, more than 26% annually to $7.73 per share. Its annual dividend of $0.16, which yields 0.05%, won't have investors retiring on the income generated, but it should more than make up for it in the capital appreciation it realizes.
In short, this growth stock shows no signs of slowing down.
Another tech stock best known for one thing but quickly branching out into new areas where it might play a leading role, Intuit (NASDAQ:INTU) is in the process of acquiring Mailchimp, an automated email service for business. The acquisition should serve as an extension of Intuit's existing lines of business services, following in the footsteps of Quickbooks accounting software, its ProSeries tax service, and its credit reporting operation CreditKarma.
But Mailchimp offers more than just email, offering an "all-in-one marketing" suite of products ranging from website domains and e-commerce stores to graphics, texting, social media, and shoppable landing pages such as those offered in partnership with Square.
Wall Street, though, seems to continuously fret over Intuit's ability to keep growing. Because TurboTax and Quickbooks are so dominant -- the former controls over two-thirds of the market, while the latter owns 80% of the accounting software sector -- analysts worry Intuit is too mature, leaving the fintech stock too few avenues of growth.
Yet Intuit has proven itself adept at meeting these challenges before, such as through the CreditKarma acquisition, which eliminated a potential competitive threat, and now with Mailchimp.
Wall Street is forecasting a lower 5.5% compounded annual growth in revenue for Intuit, but earnings are expected to expand over 10% annually, and that's before adding in the benefits from acquisitions.
Intuit also pays a modest dividend yielding 0.4% annually, but with a stock that has outpaced the gains of the S&P 500 by four-to-one over the past five years and by five-to-one over the last decade, investors should still benefit from buying into its stock.