There are plenty of pure Internet of Things plays on the market for investors to consider. CalAmp, Ambarella, and Sierra Wireless are just a few that come to mind. While those are great companies, there are alternative ways to make money from the growing movement that are a bit more stable and pay dividends.
These companies are well known around the world, but read on to find out how they're tackling the IoT and paying investors at the same time.
Intel Corp. (NASDAQ:INTC)
Maybe you never considered Intel an Internet of Things stock before, but the company is unquestionably putting its weight behind this tech wave. For more than a year Intel has been buying up smaller IoT companies, building its own chips for the Internet of Things, and teaming up with other tech companies to build a new IoT platform.
Intel's most recent move was the purchase of German semiconductor maker Lantiq to make the chipmaker's connected home ambitions a reality. Over the past year or so the company also:
- Purchased wearable tech company Basis Science.
- Partnered with Open Ceremony to make a high-end wearable tech bracelet.
- Put its chips into SMS Audio's smart headphones.
- Established an IoT platform with Accenture, Dell, SAP, and others.
- Earned $2.1 billion in revenue from its IoT division.
Intel has been a steady, albeit conservative, dividend payer over the years. As fellow Fool Anders Byland recently pointed out, Intel paid just $0.02 per share for 14 quarters after the tech bubble burst in the early 2000s. After a few bumps up, the dividend remained at $0.225 for about three years.
But at the end of January the company's board of directors upped the quarterly dividend payout per share to $0.24.. While Intel is expanding fast into the Internet of Things, investors should expect consistent dividend increases.
Cisco Systems (NASDAQ:CSCO)
This is one company that is constantly talking about the Internet of Things and diving into the space at the same time. The company makes embedded wireless routers and switches for data collection and IoT management. It's IoT tech is used in many industries, including mining, manufacturing, utilities, and oil and gas.
The company expects 50 billion items to be connected to the Internet by 2020, and by 2025 Cisco says the IoT will both generate new revenue and cost savings totaling $19 trillion. Cisco doesn't break out its IoT revenue just yet, so we're left a bit in the dark on how its Internet of Things ambitions are paying off. But the company holds 40% of global networking and communications revenue, and its IoT focus on security and analytics means Cisco is already positioned to make huge inroads into this space.
Cisco just started making dividend payouts in 2011, but has gotten rather good at it. In 2012, the company raised its payouts twice, jumping from $0.06 to $0.14 per share. Last year's dividend increase of 12% might have seemed rather moderate relative to prior increases, but considering Cisco's dividends have increased so quickly in such a short amount of time, this company is on its way to becoming a top dividend stock.
Take a look:
International Business Machines (NYSE:IBM)
I'll admit, this is an Internet of Things curveball. Until recently, IBM didn't make many IoT headlines -- but that is changing fast. And good thing for investors, too, because IBM's quarterly dividend is currently $1.1 per share.
Just a few weeks ago IBM announced that it would spend $3 billion over the next four years on its Internet of Things ambitions. The company is using the money for several initiatives, including building a new cloud-based open platform for businesses to create their own IoT apps and analytics tools for making sense of IoT data collection.
IBM hopes insurance companies will use some of this new tech to offer usage-based insurance (in which drivers pay premiums based on how they drive). The company is also implementing new IoT options into its existing Bluemix platform-as-a-service so businesses can monitor and analyze real-time data from factories, equipment, and other assets. On top of all that, IBM has teamed up with The Weather Company, parent of The Weather Channel, to offer real-time weather analytics to businesses.
IBM has been paying investors for a long time, and the company's yield has slowly but steadily increased since the mid-1990s.
While IBM is just getting started in the IoT, its recent $3 billion commitment and new partnerships set the company up to be a major player in the space. Add IBM's current dividend payouts -- as well as its ability to increase them -- and IoT investors could have a winner on their hands.
Not the only IoT plays
Of course, these tech juggernauts aren't the only Internet of Things plays, and they likely won't be the fastest-growing ones, either. But these stocks are definitely worth considering for investors looking for dividend payouts and a strong focus on the Internet of Things.
Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Accenture, Ambarella, CalAmp, Cisco Systems, Intel, and Sierra Wireless. The Motley Fool owns shares of Ambarella and International Business Machines. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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