With the market bursting through to all-time highs, there is always that sense of investor concern over what to do next. One good idea is to look at the sectors that are full of good companies, but that have not been the leaders. Not surprisingly, utilities, telecom and consumer staples have led the market higher as they all serve as bond proxies. Since May of 2015, however, technology is just flat, and it may be offering investors among the best entry points in years.
We screened the Merrill Lynch research database for large cap technology stocks that are rated Buy, pay a dividend greater than the 30-year U.S. Treasury, and are among the largest in capitalization. We found four that make very good sense now for aggressive growth accounts.
This is the printer and personal computer businesses of the old Hewlett-Packard. HP Inc. (NYSE: HPQ) provides products, technologies, software, solutions and services to individual consumers and small- and medium-sized businesses, as well as to the government, health and education sectors worldwide.
The company’s Personal Systems segment offers commercial personal computers (PCs), consumer PCs, workstations, thin client PCs, tablets, retail point-of-sale systems, calculators and other related accessories, software, support and services for the commercial and consumer markets.
The Printing segment provides consumer and commercial printer hardware, supplies, media, scanning device and software and services, as well as LaserJet and enterprise, inkjet and printing, graphics, and software and web services.
HP investors receive a 3.6% dividend. The Merrill Lynch price target for the stock is $15, and the Thomson/First Call consensus estimate is $14.55. The shares closed most recently at $13.80.
This leader in semiconductors is working hard to scale away from dependence on personal computers. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide. The company’s platforms are used in various computing applications comprising notebooks, two-in-one systems, desktops, servers, tablets, smartphones, wireless and wired connectivity products, wearables, retail devices and manufacturing devices, as well as for retail, transportation, industrial, buildings, home use and other market segments.
The company also provides communication and connectivity offerings, such as baseband processors, radio frequency transceivers and power management integrated circuits, and tablet, phone and Internet of Things solutions, which include multimode 4G LTE modems, Bluetooth technology and GPS receivers, software solutions and interoperability tests, as well as home gateway and set-top box components.
Intel reported an inline first quarter, and lowered the forward outlook. Merrill Lynch stays positive on the company and believes there is solid upside potential for the stock. Some analysts think the restructuring can ultimately translate to $0.23 in annual earnings-per-share savings.
Intel investors receive a 2.95% dividend. Merrill Lynch recently raised the price target to $40 from $36. The consensus price target is $36. Shares closed Thursday at $35.20.