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The Technology Sector Is the Place for Dividend Growth

Aaron Levitt Dec 27, 2015

If you had to guess which sectors are the best for finding dividends, odds are you’d say industries like utilities, health care or consumer staples. After all, these sectors feature relatively stable cash flows and growth that leads to predictability—that predictability leads to paying out steady dividends.

There’s a pretty good chance that technology stocks wouldn’t be on your list. The NASDAQ 100 Index-tracking PowerShares QQQ Trust (QQQ ) only yields 1.01%—that’s hardly the stuff income seekers dream of, but tech is for growth only, right?

The answer would be a big, fat “no”.

Today’s broader technology sector is far removed from the world of all revenue, no profits-styled companies that used to dominate during the dotcom boom. Tech now mints cash just as well, if not better than many of the traditional dividend sectors listed above. And what’s more, its tech companies are sharing the dividend love with investors at better rates than their income-oriented rivals.

You may wonder if tech is just for growth. Hardly… it’s an income seekers paradise.

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