4 Large Cap Technology Stocks to Buy That Pay Big Dividends

Despite the stomach churning market volatility, there is one big positive in the indexes retesting the lows from last August and September. While the bearish symphony keeps bringing up the potential for recession, the fact of the matter is at this juncture it seems remote for this year. Growth may not be super-charged, but it should be enough to keep negative gross domestic product at a distance.

One sector that most Wall Street strategists are positive on is technology, and for the most part, fourth-quarter earnings were solid. In some cases like Alphabet and Facebook, the numbers were of the blowout variety.

We screened the Merrill Lynch research database for top tech stocks that are rated Buy at the firm that pay big dividends. We found four that all have a higher dividend yield than the 30-year U.S. Treasury bond.


This top mega-cap technology stock pick on Wall Street is perhaps a surprising defensive pick for volatile markets like we have witnessed. Cisco Systems Inc. (NASDAQ: CSCO) posted disappointing earnings in November, and many on Wall Street lowered their price targets for the networking giant significantly. Yet, Cisco is also one of the 24/7 Wall St. top 10 stocks to own for the next decade.

Last year Cisco won an important contract for the Verizon build-out of the company’s next-generation 100G metro network. While Cisco’s optical business is small as a part of total revenue, this win is seen by Wall Street as a significant endorsement of the investments Cisco has made in its optics business.

Analysts across Wall Street point to an estimated double-digit bookings momentum for Cisco’s Meraki Cloud Services. Many think that Meraki likely will be a $1 billion plus run-rate business this year, with an incredible 50% to 70% compounded annual growth rate. A jump from 40 GE to 100 GE data center switching and next generation security also are adding to the total sales profile and product mix.

Cisco investors receive a 3.57% dividend. The Merrill Lynch price target for the stock is $30, and the Thomson/First Call consensus price target is $30.50. The shares closed most recently at $23.54.


This stock traded sideways all last year and actually closed down from where it started 2015, but with $21 billion of cash on the books the dividend looks very safe. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide that are used in various computing applications including notebooks, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, transportation systems and retail devices.

Intel purchased chip rival Altera last year for a massive $16.8 billion, and the deal closed on December 28. The addition helps Intel start to move away from the personal computer dependence and puts it into the traditional fabless market of programmable logic devices. By 2020, 50% of Altera’s product line could be manufactured at Intel facilities.

Intel’s NAND flash memory business has a strong focus on enterprise opportunities. Many on Wall Street who think that the company’s new chip, a collaboration with Micron Technology called the 3D XPoint, could be primarily In-Memory compute in servers and its launch should coincide with Intel’s Purley platform server launch in 2016.

Merrill Lynch cites data center growth; easier comparisons on PC sales, especially with renewed enterprise interest on Windows 10; and at current prices the stock is a very solid risk/reward addition to growth portfolios.

Investors receive a 3.5% dividend. Merrill Lynch recently raised its price target to $40. The consensus target is $36.54. Shares closed Thursday at $29.77.

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