One of the best places for investors to have been over the past year was the technology sector, and with good reason. Industry giant Apple Inc. (NASDAQ: AAPL) had a massive 86% increase alone in 2019. However, the question facing investors in the sector is simple: Where do we go now?
With fourth-quarter earnings reporting winding down, we decided to review the results, looking for tech stocks that delivered solid earnings, were rated Buy at Merrill Lynch and also paid solid dependable dividends. We found five stocks that look like solid investments for 2020 and that should hold up better if we get a protracted technology and momentum sell-off.
This stock has rallied smartly off last summer’s lows and could potentially break out to new highs this year. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems and displays.
Top Wall Street analysts like Broadcom’s leadership in the mobile, data center and broadband markets, and especially in the radio frequency (RF) arena. Many analysts see a cyclical rebound in industrial and communications demand.
Broadcom investors receive a very solid 4.07% dividend. Merrill Lynch has a $360 price target on the shares. The Wall Street consensus target is handily lower at $350.62, and Broadcom stock closed Thursday’s trading at $319.16 per share.
This company continues to be a huge player in the fiber optic world, and it resides on the Merrill Lynch US 1 stock list of top picks. 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 industry. In addition, the company’s Environmental Technologies division (12% of sales) produces specialized glass, glass ceramic and polymer-based products for the automotive industry.
Corning offers shareholders a reasonable 2.84% dividend. Merrill Lynch has a $34 price target, while the consensus target was last seen at $30.17. Corning stock closed at $28.17 a share on Thursday.
This blue-chip giant still offers investors a very solid entry point. International Business Machines Corp. (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of information technology (IT) hardware, business and IT services, and a full suite of software solutions. The company integrates its hardware products with its software and services offerings in order to provide high-value solutions.
IBM’s five major segments are: 1) Cognitive Solutions, 2) Global Business Services, 3) Technology Services & Cloud Platforms, 4) Systems and 5) Global Financing. Analysts cite the company’s potential in the public cloud as a reason for their positive outlook going forward. But note that IBM is among the big corporations with the most debt.