Dividends come with many great perks, with the payouts essentially reflecting a form of ‘payday’ in the market. Technology sector stocks are often overlooked by income-focused investors, as these companies commonly use spare cash to fuel further growth.
But perhaps to the surprise of some, several stocks involved closely in the AI trade – Broadcom AVGO, Taiwan Semiconductor TSM, and NVIDIA NVDA – shell out dividend payments. For those interested in getting paid with some AI exposure, let’s take a closer look at each.
Taiwan Semiconductor's Critical Role
Taiwan Semiconductor’s critical role in the semiconductor industry has positioned it in an extremely bullish position concerning the AI craze. Shares currently yield 0.7% annually, with TSM also sporting a shareholder-friendly 15.4% five-year annualized dividend growth rate.
TSM’s EPS outlook remains bullish across the board thanks to the favorable environment, helping support continued share momentum.
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Broadcom Generates Huge Cash
Broadcom has long been recognized as a strong dividend technology player thanks to its strong cash generation, enabling it to increasingly reward shareholders. The company boasts a sizable 13.1% five-year annualized dividend growth rate, with shares currently yielding 0.6% annually.
For a quick reminder, Broadcom provides custom AI chips and high-speed networking solutions needed to connect massive GPU clusters. Like TSM, Broadcom also sports a bullish EPS outlook across the board thanks to the favorable operating environment, holding a Zacks Rank #2 (Buy).
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NVIDIA Remains King
NVIDIA continues to be the AI favorite thanks to its Data Center results that have shown historically strong growth. Shares currently yield a small 0.02% annually, but its current positioning keeps it as a stock that you can’t ignore, no matter what.
The rich demand backdrop has kept the stock at a favorable Zacks Rank #2 (Buy), with analysts continuing to remain bullish across the board.
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Bottom Line
Dividends come with great perks for investors, providing an income stream and the ability to maximize returns through dividend reinvestment.
Although all three dividend-paying tech stocks above – Broadcom AVGO, Taiwan Semiconductor TSM, and NVIDIA NVDA – aren’t high-yield, the bullish EPS outlooks paired with rock-solid growth outlooks can’t be overlooked by income-focused investors looking to obtain some AI exposure.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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Broadcom Inc. (AVGO) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
