Dividends are a great thing: immediate cash that you can use to cover expenses or reinvest in more stocks. Unfortunately, for a long time, the attitude among Silicon Valley-types was to avoid paying dividends. With Apple's
Mr. Softy serves a growing yield
With Apple's stock on a tear, it's easy to forget about tech behemoth Microsoft. Sure, Apple's growth in mobile, tablets, and Mac PCs is a threat to Microsoft's well-established monopoly. However, there is still money to be made in Microsoft stock. The company generates a healthy amount of cash -- more than $27 billion over the past year alone. Management is paying out a portion of that cash now via a 2.5% dividend, and I expect the dividend will grow. The payout ratio (dividends divided by earnings) is only 25%. Since 2007, management has doubled the quarterly dividend from $0.10 to $0.20. I'd be surprised if, over the next five years, the dividend doesn't double again.
Cashing a 4.1% Paychex
Finding its way to a 4% yield
Navigational-equipment maker Garmin
Looking beyond tech
I like dividend-paying tech stocks, but they shouldn't be the only thing in your dividend portfolio. It's a good idea to spread your stocks across sectors to reduce risk. If you're constructing a dividend portfolio, I'd take a close look at all three stocks above. But I also recommend taking a look at one of our newest special free reports: "Secure Your Future With 9 Rock-Solid Dividend Stocks." It details a group of dividend stocks, including familiar blue chips and some you may not have heard of, that you can count on to pay you back for decades to come. Click right here to get it.
Brendan Mathews owns shares of Apple. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft, Automatic Data Processing, Apple, Google, and Paychex. Motley Fool newsletter services have recommended creating bull call spread positions in Microsoft and Apple, and creating a write covered straddle position in Paychex. The Motley Fool has a disclosure policy.