by John Buckingham, editor The Prudent Speculator
It is never easy to steer the ship through stormy seas, but the numbers
simply don't lie — the kind of dividend-paying, value-priced stocks that
we favor historically have enjoyed superb long-term returns for those
with the courage and conviction to stick with them through thick and
Here's a look at three recommended dividend-paying technology stocks: International Business Machines (IBM), Intel (INTC) and NVIDIA (NVDA).
[Related -Intel Corporation (INTC): What To Watch At Analyst Day?]
Impressively, IBM just closed its 10th straight year of double-digit
earnings growth and recognized $18.2 billion in free cash flow for 2012,
which is $12 billion better than a decade ago.
expectations and the company saw successful launches in high-end
systems, while it began to reap rewards from its recent global growth
Happily, stock repurchases for 2012 topped $10
billion, reducing the share count by 4%, while $8.7 billion is still
remaining in buyback authorizations.
While we see the potential
for a soft business environment in some parts of the world, namely
Europe, we believe the future looks bright with IBM's goal of $20 in EPS
by 2015 still firmly on track.
[Related -NVIDIA Corporation (NVDA) Q3 Earnings Preview: Can We See Another Beat?]
expect to see continued growth in demand for advanced chips from Intel,
particularly for data centers and for Ultrabooks, both of which require
high performance and low power consumption.
According to Intel,
the volume of notebooks shipped that are less than an inch thin has
risen 18 times in the last year in the U.S. and seems likely to keep
that pace in the upcoming year. Such a forecast bodes well for the
company, we believe, given its sizeable edge in the market.
date, none of Intel's competitors have mastered the space-saving and
energy-efficient three-dimensional transistor, nor do any appear to have
it in the near-term pipeline.
The company is set to launch its
‘Haswell' line of processors, which Intel believes will make significant
improvements upon the previous generation of processors by adding new
architecture, or coding language, thereby improving speed, power usage
and overall usability.
We like that Intel has a diversified
revenue stream, low levels of debt, a competitive assortment of products
and a 4.3% dividend yield.
NVIDIA is a top-tier designer, developer and marketer of three dimensional graphics processors for personal computing.
a long-time leader in its industry, NVDA announced its first venture
into the portable hardware device market when it unveiled the Project
Shield mobile gaming platform at the Consumer Electronics Show last
In our view, the platform is unlikely to become the next
Playstation, but it should serve well as a ‘proof of concept' device
that the company will be able to use to gain valuable data when
designing its mobile chips.
Additionally, NVIDIA recently
released its Tegra 4 mobile processor line, which boasts a quad-core
CPU, reduced power consumption and 72 graphics processing cores.
the company may see a slow ramp as manufacturers get on board with the
Tegra 4 line, we believe that the performance superiority of the chip
will lure many, especially considering that the processor runs faster
than any offering from its competitors. The company's inexpensive
valuation and 2.4% yield offer an attractive entry point.