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Subscription Model Success Helps Technology Giant Strengthen Position on Best Dividend Stocks List

Aaron Levitt May 22, 2019


You know your business model is successful when everyone in your sector tries to replicate it. And that’s the case for our Best Dividend Stocks List pick in the technology sector. Our firm was one of the original tech stocks to begin the services/recurring revenues model – shifting from being strictly a hardware producer. It turns out, this was the correct decision. With its latest quarter in the record books, our pick continues to produce massive amounts of cash flows and profits from this business model.

Perhaps even better is that it continues to share those profits with investors with an upsized buyback program of over $15 billion and a hefty dividend increase. But our pick isn’t done growing. Not by a long shot. There will be plenty of dividend growth ahead.

See the original article on our pick here.

For starters, the 5G roll-out and continued data center demand is only boosting our pick’s revenues even further. As cloud computing/wireless adoption continues to grow, our pick continues to see the lion’s share of the build-out. Meanwhile, new advances in conversational A.I. and data mining applications are allowing our pick to keep both growth and margins high. Our pick continues to benefit from upselling opportunities and an overall total service package with customers. This will strengthen our pick’s future even further.

Add in low exposure to China, a fortress-like balance sheet and smart M&A – you have a match made in heaven. No wonder our pick has been so successful as a Best Dividend Stocks List’s candidate.

To summarize, here are five reasons why you should own this stock:

  1. Recorded nearly $50 billion in sales for all of 2018 – a 3% year-over-year increase.
  2. Higher-margined subscriptions now make up nearly 2/3rd of its revenues as of last quarter.
  3. Operating cash flows jumped 15%+ year-over-year and the firm has nearly $35 billion in cash on its balance sheet.
  4. Has raised its dividend every year since 2011, with its latest increase clocking in at more than 5%.
  5. Healthy payout ratio of just over 50% and a yield of 2.48%.

Our Best Dividend Stocks List has 20 of the highest-rated stocks by our proprietary rating system. Go Premium to find out the entire list.

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