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It seems like tech stocks are always popular. Increasing digitization, inclusive connectivity, and a growing tech footprint worldwide generate a lot of money for companies and their investors. Heck, the most valuable companies in the world are mostly tech companies!
However, the tech sector has always been considered a high-risk investment. Time and time again, we’ve seen how volatile and sensitive to ever-changing market trends they are.
Still, rewards come with commensurate risks, as tech stocks tend to be hit hard when a bear market rolls around. Yet, there are ways to mitigate the risks of such investments, like choosing tech stocks with high dividend yields.
How I Came Up With These High-Yielding Tech Stocks
Barchart’s free stocks screener allows users to filter the stock market using various categories. For this instance, I used the Market Sector filter, which has 16 sectors to choose from, and selected Computers and Technology.
Then, I used the Annual Dividend Yield % filter to find the highest-yielding tech stocks in the market. Since we’re looking for the best of the best, I used 10% as the minimum yield and found three likely candidates.
Now, let’s see if these three are worth an investment.
Vodafone Group (VOD)
Vodafone Group primarily provides telecommunication services to Europe like Verizon, AT&T, and T-Mobile do in the US. The company also operates in Africa, Australia, New Zealand, and Asia.
However, Vodafone is not limited to phone services. The company also offers integrated Internet of Things (IoT) connectivity services for automotive and insurance services, health solutions, public and private cloud security, and security products for online communication channels.
VOD stock has a forward dividend yield of 11.44%, based on the last payout in February 2024, which was 45 eurocents or about 49 cents USD.
While dividend payouts have been fluctuating these past few years, one thing I can say about Vodafone is that it’s consistent. The company has a semi-annual payout scheme, with the interim payout announced in November (paid out in February) and the final payout announced in June (paid out in August).
The schedule is good news for investors who might want to participate, as it gives them plenty of time to buy shares.
However, VOD stock currently has an average hold recommendation from analysts based on two strong sells, two strong buys, and four holds. It also reported a slight decrease in total revenue for Q3’24. Not only that, Net Income has turned around significantly from a loss of 9.287 Billion in 2019 to a 12.328 Billion profit in 2023. To me, it looks like investors buying Vodafone will likely get the stock at a discount.
Jiayin Group (JFIN)
Based in China, Jiayin Group specializes in fintech and loan facilitation between institutions and primarily underserved borrowers. In addition to facilitation, the company offers a proprietary risk assessment and management system for banks and other financial institutions and a referral service for investment products.
Jiayin ended 2023 with excellent results. Revenue increased significantly by 67.1%, while net income grew by 9.95% YOY.
As for dividends, JFIN stock paid 80 cents per share for FY’23, reflecting an 11.94% forward yield. However, the company has only paid dividends twice and claims this attractive double-digit yield represents only 25% of its net income after tax,
Not only that, Jiayin commits to shareholder value in no uncertain terms, stating that “In 2024, we expect to continue returning more value to shareholders by maintaining or increasing dividends when market conditions improve.”
Jiayin looks like a budding dividend stock, and it’s fair to say that it’s the most attractive on this list in terms of potential, if not payout history. So, add it to your watch list, or, better yet, start stocking up on shares.
Mind CTI (MNDO)
Mind C.T.I. offers billing and customer care solutions to communication providers in Romania, Germany, Israel, and the US. Its clients include traditional telecommunications providers, VoIP, cable, broadband IP, wireless, and mobile virtual network operators.
The company’s services include real-time call accounting software, product mediation, customer care, and billing solutions.
Mind CTI’s 2023 financial report indicated that revenue and net income fell flat YOY. The rest of its reported metrics were lackluster, falling flat or slightly decreasing from 2022.
However, the report has some positive news that interested investors might want to know. First, Mind CTI has signed with its first European customer in 2023, potentially opening up new revenue streams for the company.Second, and more importantly, the company has maintained a dividend policy since 2003. Like Vodafone, Mind’s dividend rates tend to fluctuate, yet shareholders of MNDO stock have enjoyed consistent payouts at around double-digit percentages since the policy announcement.
The dividend rate is currently set at 24 cents, reflecting a 12.30% yield based on MNDO stock's latest trading prices. One thing I don’t like about MNDO, though, is its relatively high 93.42% dividend payout ratio. So, growing the dividend won't likely be in the cards until net income increases.
Another thing of note here is that the company distributes dividends in one payout around March every year. This is extremely noticeable in its chart, where we can see that investors buy shares in bulk and push prices up, starting around every announcement. But if you play your cards right, you may get MNDO stocks before the 2025 payout.
Final Thoughts
Tech stocks don’t have to be all about risky growth. With the right selection, you can mitigate the risks of market volatility with consistent dividend payouts from companies like these three.
On the date of publication, Rick Orford did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
