Summer is finally starting to turn to fall, and that means the traders and portfolio managers are back from vacation and ready to make plans for what could be a very bumpy rest of 2016. With the potential for interest rate increases, a sure to be intense final 60 days to the presidential election, and typical seasonal volatility, caution may be the best avenue for now.
For growth investors with a longer term time horizon, one well to go to is large cap technology, especially the companies that also pay solid dividends. We screened the research universe at Merrill Lynch looking for large cap technology leaders that pay dividends. We found four rated Buy that make good sense now.
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 3.4% dividend. The Merrill Lynch price target for the stock is $15, and the Wall Street consensus estimate is $15.54. The shares closed Tuesday at $14.63.
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 second quarter, but data center sales came in way below expectations. But a new partnership with Microsoft for a virtual reality, as well as a consistent shift away for reliance on chips for personal computers, keeps the stock a compelling buy.
Intel investors receive a 2.85% dividend. The $42 Merrill Lynch price target compares with the consensus target of $37.58. The shares closed Tuesday at $36.57.