Top Wall Street Strategist Says Buy These 5 Safe Dividend-Paying Tech Stocks Now

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Published: February 24, 2022 6:37 am

Last Updated: February 24, 2022 6:41 am

If any sector has been bludgeoned since the beginning of the year it is technology, and the companies in the sector that make no money have been put in the Wall Street penalty box until further notice. Despite the massive selling across the sector, tech is still a stunning 28% of the market weight of the S&P 500. Old-timers remember the value trap of technology after the dot-com explosion in 2000, when it took 10 years for the sector to repair the self-inflicted damage. The question now is if that be the case again.

A new report from Savita Subramanian, the outstanding equity and quant strategist at BofA Securities, and her team, makes the case that while hedge funds have been big sellers of the sector, the long-only portfolio managers mostly have stood their ground. While wanting to avoid the turn of the century value trap/dead money scenario, the BofA team has compiled a list of stocks that all feature high one-year return on equity, solid relative strength numbers, high earnings-per-share revisions and high free cash flow/enterprise value metrics.

We screened that list for stocks that also pay a solid and dependable dividend. While all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Broadcom

The company reported solid earnings, and its stock is a top pick across Wall Street for dividend growth. 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, servers and storage, factory automation, power generation and alternative energy systems and displays.

The BofA analysts and many on Wall Street are very positive on the company’s massive $10 billion share repurchase authorization, which represents about 4.2% of the company’s market cap.

Broadcom stock investors receive a 2.84% dividend. The BofA Securities price target is $750, while the consensus target is just $677.67. The stock closed trading on Wednesday at $565.19.

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Cisco

Investors who are more conservative may want to consider this mega-cap tech leader. Cisco Systems Inc. (NASDAQ: CSCO) designs, manufactures and sells internet protocol (IP) based networking products and services related to the communications and information technology industry worldwide.
Cisco provides switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points and servers, as well as next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice and video applications.

Its cybersecurity products give clients the scope, scale and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.

Shareholders receive a 2.70% dividend. BofA Securities has a target price on Cisco Systems stock of $68. The consensus target is $62.63 and Wednesday’s closing share price was $54.44.

Hewlett Packard Enterprise

This spin-off from a Silicon Valley legend holds solid upside potential. Hewlett Packard Enterprise Co. (NYSE: HPE) provides solutions that allow customers to capture, analyze and act upon data seamlessly.

The company offers general purpose servers for multi-workload computing and workload-optimized servers; HPE ProLiant rack and tower servers; HPE BladeSystem, HPE Synergy and HPE ProLiant; storage solutions; and solutions for secondary workloads and traditional tape, storage networking and disk products, such as HPE Modular Storage Arrays and HPE XP. It also offers HPE Apollo and Cray products, as well as HPE Superdome Flex, HPE Nonstop, HPE Integrity, HPE Moonshot, and HPE Edgeline products.

HPE provides mobility and Internet of Things solutions under the Aruba brand, which include Wi-Fi access points, switches, routers and sensors; cloud-based management, network management, network access control, analytics and assurance, and location services; and professional and support services, as well as as-a-service and consumption models for the intelligent edge portfolio of products.

The company also offers various leasing, financing, IT consumption, and utility programs and asset management services for customers to facilitate technology deployment models and the acquisition of complete IT solutions, including hardware, software, and services from HPE and others. Further, the company invests in communications and media solutions, Hewlett Packard labs, and various business incubation projects.

Investors receive a 2.77% dividend. The $19 BofA Securities price target compares with the $17.40 consensus target. Hewlett Packard Enterprise stock ended Wednesday trading at $16.62 a share.

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Juniper Networks

This is another familiar name that could offer among the best total return potential. Juniper Networks Inc. (NYSE: JNPR) designs, develops and sells network products and services worldwide. The company offers various routing products, such as ACX series universal access routers to deploy new high-bandwidth services; MX series Ethernet routers that function as a universal edge platform; PTX series packet transport routers; and NorthStar controllers.
Juniper Networks also provides switching products, including EX series Ethernet switches to address the access, aggregation and core layer switching requirements of micro branch, branch office, and campus environments; QFX series of core, spine and top-of-rack data center switches; and Juniper access points, which provide wireless access and performance.

In addition, the company offers security products including SRX series services gateways for the data center; Branch SRX family provides an integrated firewall and next-generation firewall; virtual firewall that delivers various features of physical firewalls; and advanced malware protection, a cloud-based service and Juniper ATP.

Investors receive a 2.48% dividend. BofA Securities has set a $34 price target. The consensus target for Juniper Networks stock is $27.53. The shares were closed on Wednesday at $33.19.

Seagate

This disk drive giant is hitting on all cylinders and looks reasonable at current trading levels. Seagate Technology Holdings PLC (NASDAQ: STX) provides data storage technology and solutions in Singapore, the United States, the Netherlands and elsewhere.

The company offers hard disk and solid state drives, including serial advanced technology attachment, serial attached SCSI and non-volatile memory express products; solid state hybrid drives; and storage subsystems. Its products are used in enterprise servers and storage systems and edge compute and non-compute applications.

Seagate also provides an enterprise data solutions portfolio, comprising storage subsystems and mass capacity optimized private cloud storage solutions for enterprises, cloud service providers and scale-out storage servers and original equipment manufacturers. In addition, it offers external storage solutions under the Seagate Backup Plus and Expansion product lines, as well as under the LaCie and Maxtor brands in capacities up to 16 terabytes.

Shareholders receive a 2.61% dividend. The Seagate Technology stock price target at BofA Securities is $130, well above the $102.90 consensus target. The shares closed at $104.83 on Wednesday.