The current stock market investing reality is that 10 companies made up 95% of the gains in the S&P 500 in 2023, and nine of the 10 heaviest-weighted stocks in the Nasdaq 100 have accounted for almost all the profits. What do these stocks have in common? They are nearly all technology stocks, and the technology sector will likely continue to drive the upside for the rest of this year.
While all the major firms have continued to pound the table on the “Magnificent 7, ” they are all becoming overpriced and could take a big hit in a massive market sell-off.
Over the last year, technology has been in the spotlight as layoffs have been massive. Amazon.com alone is laying off close to 20,000 employees. Does that mean the industry is doomed? Not at all; the massive belt-tightening is due to the over-hiring and growth spurt that was a product of the COVID-19 pandemic, and to increase earnings, big tech is cutting costs.
We screened our 24/7 Wall St. technology research universe, looking for Buy-rated large-cap companies on Wall Street and paying the most significant dividends in the sector.
This company remains a massive player in the fiber optic world and pays a hefty 3.70% dividend. Corning Inc. (NYSE: GLW) is a technology pioneer that manufactures LCD glass for flat-panel displays for multiple product lines.
Telecommunications (30% of sales) produces optical fiber and cable, component hardware and equipment, and photonic components for the telecommunications, CATV, and networking industries.
In addition, the company’s Environmental Technologies division (12% of sales) produces specialized glass, glass-ceramic, and polymer-based products for the automotive industry.
Warren Buffett stunned Wall Street last year when Berkshire Hathaway reported a purchase of 121 million shares of the venerable tech giant, but he has been selling shares recently, which yield 3.73%. HP Inc. (NYSE: HPQ) provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally.
The company operates through three segments:
- Personal Systems
- Corporate Investments
The Personal Systems segment offers:
- Commercial and consumer desktop and notebook personal computers
- Thin clients
- Commercial mobility devices
- Retail point-of-sale systems
- Displays and peripherals
- Software, support
The Printing segment provides:
- Consumer and commercial printer hardware
The Corporate Investments segment is involved in the HP Labs, business incubation, and investment projects. It serves individual consumers, small- and medium-sized businesses, and large enterprises, including government, health, and education customers.
This blue-chip giant still offers investors a solid entry point, a big 3.82% dividend, and a degree of safety for more conservative investors. International Business Machines Corp. (NYSE: IBM) provides integrated solutions and services worldwide.
The company operates through four business segments:
The Software segment offers:
- Hybrid cloud platforms and software solutions
- Red Hat, an enterprise open-source solution
- Software for business automation
- AIOps and management, integration, and application servers
- Data and artificial intelligence solutions
- Security software and services for threat, data, and identity
This segment also provides transaction processing software that supports clients’ mission-critical and on-premise workloads in the banking, airline, and retail industries.
The consulting segment offers:
- Business transformation services, including strategy, business process design and operations
- Data and analytics
- System integration
- Technology consulting
- Application and cloud platform services
The Infrastructure segment provides:
- On-premises and cloud-based server and storage solutions for its clients’ mission-critical and regulated workloads
- Support services and solutions for hybrid cloud infrastructure
- Remanufacturing and remarketing services for used equipment
The Financing segment offers lease, installment payment, loan financing, and short-term working capital financing services.
This is another familiar name that could be offering among the best total return potential with a hefty 3.28% dividend. Juniper Networks Inc. (NASDAQ: JNPR) designs, develops, and sells network products and services worldwide.
The company offers routing products, such as:
- ACX series universal access routers to deploy high-bandwidth services
- MX series Ethernet routers that function as versatile edge platforms
- PTX series packet transport routers
- NorthStar controllers
Juniper Networks also provides switching products, including:
- EX series Ethernet switches to address the access
- Aggregation, and core layer switching requirements of micro branch, branch office, and campus environments
- QFX series of core, spine, and top-of-rack data center switches
- Juniper access points, which provide wireless access and performance
In addition, the company offers security products comprising:
- SRX series services gateways for the data center
- Branch SRX family provides an integrated firewall and next-generation firewall
- Virtual firewall that delivers various features of physical firewalls
- Advanced malware protection, a cloud-based service
- Juniper ATP
The company is being bought in an all-cash $14 billion deal by Hewlett Packard Enterprise Co. (NYSE: HPE).
This disk drive giant looks reasonable at current trading levels, especially with a 3.14% dividend. Seagate Technology Holdings PLC (NASDAQ: STX) provides data storage technology and solutions in Singapore, the United States, the Netherlands, and internationally.
The company offers hard disk and solid state drives, including serial advanced technology attachment, serial attached SCSI, non-volatile memory express products, solid state hybrid drives, and storage subsystems.
Its products are used in enterprise servers and storage systems, edge computing, and non-compute applications.
Seagate also provides an enterprise data solutions portfolio comprising:
- Storage subsystems and mass capacity-optimized private cloud solutions for enterprises, cloud service providers
- Scale-out storage servers
- Original equipment manufacturers (OEMs).
In addition, it offers external storage solutions under the Seagate Backup Plus and Expansion product lines, as well as under the LaCie and Maxtor brands, with capacities of up to 16 terabytes.
This old-school legacy semiconductor tech company offers solid value at current levels and pays a solid 2.98% dividend. Texas Instruments Inc. (NASDAQ: TXN) is a broad-based supplier of semiconductor components, ranging from digital signal processors to high-performance analog components to digital light-processing technology and calculators.
65% of the company’s sales are exposed to the well-diversified:
- Business-to-business Industrial
- Communications Infrastructure
- Enterprise markets
While businesses from those sectors, especially automotive, could suffer soon, top analysts feel the solid dividend should support the shares.
The company is also a significant Apple supplier, so the long-term outlook for this venerable leader makes it a safer bet for investors with less risk tolerance.
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