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Practical Advice from

3 Tech Stocks Paying Big Dividends to Income Investors

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Technology stocks and dividends go together like ice cream and chopped liver, which is to say they don’t, although there are always exceptions.

This is because technology companies generally focus on growth. The saying in the industry is that if they’re paying you to own their stock then they don’t have anything better to do with the money. Growth is expensive, and it pays to invest ahead of it, whether that is in equipment or in people.

But, as with haggis ice cream, there are exceptions.

Telephony is one such exception. Companies like AT&T Inc. (T) and Verizon Communications Inc. (VZ) have long paid dividends approaching 5%. Their equipment suppliers like Harris Corporation (HRS) represent another exception. The growth rates tend to be low, and dividends are necessary to attract capital.

Hard disk drives are a third example. They are slowly being replaced by memory chips, which are faster, have no moving parts, and are growing cheaper by the day. So companies like Western Digital Corp.(WDC) pay handsome dividends to make up for a lack of capital gains.

Then there are exceptions within the exceptions, technology companies where the yield is truly extraordinary, because valuations have been beaten down. The careful dividend shoppers can find some great deals in this bargain bin.

This slide show is from InvestorPlace, not the Kiplinger editorial staff.

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