If any sector is poised to roar back when the current coronavirus worries are in the rear-view mirror, it’s technology, and with good reason. The sector is led by American companies and ingenuity, and in an ironic twist, it has been technology that has helped both Americans and American business stay in the game as shelter-in-place regulations have moved many to home offices or remote locations.
Looking for investment opportunities in the technology sector makes sense now for more aggressive accounts. One way to temper the risk is to look for established companies that also pay dividends. We screened the Merrill Lynch technology universe for stocks rated Buy that also pay dependable quarterly dividends. We found four that look like solid additions for aggressive growth accounts looking for a total return angle now.
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Broadcom
This stock has rallied smartly off the lows and offers big upside potential. 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 on Wall Street see a cyclical rebound in industrial and communications demand on the horizon, despite the current slowdown. While the balance of 2020 is a jump ball, 2021 looks very promising.
Investors receive a 5.48% dividend. Merrill has a $305 price target on the shares, and the Wall Street consensus target is $291. Broadcom stock closed Thursday at $237.06, up just over 6% on the day.
Corning
This company continues to be a huge player in the fiber optic world. 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. The future remains solid for this diversified digital world leader.
Shareholders receive a 4.71% dividend. Merrill has a $34 price target, while the consensus target is $26.82. Corning stock was last seen trading at $18.70 per share.
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