Three Dividend-Paying Tech Stocks to Buy in April

Dividend investors tend to favor stocks with the highest yields. However, a stock's yield may look attractive only because its underlying business is facing other problems. The company may also be struggling to generate enough earnings or free cash flow (FCF) growth to support a dividend payment.

So instead of focusing only on the highest-yielding dividend stocks, investors should look for companies that offer a balanced mix of value, growth and income. I think these three blue-chip tech stocks tick all the boxes: Dell Technologies firms(NYSE: DELL),BroadcomCompany (NASDAQ: AVGO(math.) and Oracle Corporation (NYSE: ORCL)The

Let's take a look at why these three dividend-paying tech stocks are April buys.

1. Dell Technologies

Dell became a publicly traded company again in December 2018, nearly six years after its founder and chief executive officer Michael Dell took the company private. Dell then divested its stake in cloud software giant VMware 81% in 2021, and now derives the majority of its revenue from personal computers, servers and data storage products.

In fiscal 2024 (ended February), Dell's revenue and adjusted EPS declined 14% and 6%, respectively. the PC business remained weak in the post-pandemic market, and sluggish sales of data storage products offset strong server sales.

This slowdown is disappointing, but Dell expects to "return to growth" in fiscal 2025 as the PC market stabilizes, the AI-optimized server sales set increases, and the storage solutions business catches up with server market growth. Analysts expect Dell to grow both full-year revenue and adjusted EPS by approximately 6%.

Over the long term, Dell is targeting annual revenue growth of about 3%-4%, annual adjusted EPS growth of at least 8%, and returning at least 80% of the adjusted FCF to investors through buybacks and dividends. Currently, Dell's forward earnings yield is 1.6%, its dividend payout ratio is as low as 34%, and its stock still looks cheap at a forward P/E of 17x.

2. Broadcom

Broadcom, formerly Avago Technologies before it acquired the original Broadcom in 2016, is one of the world's largest chipmakers. It also owns an infrastructure software business, and last November bought VMware for $69 billion, expanding that small business to about half of its top line.

Broadcom's revenues and adjusted EPS for fiscal 2023 (ended October last year) grew by 8% and 12%, respectively. much of this growth was driven by the expansion of the AI market, which greatly boosted sales of its data center and networking chips. Broadcom expects that chips for AI will account for 35% of its total semiconductor revenue by fiscal 2024.

In May of last year, Broadcom also signed a new "multi-billion dollar agreement",曏Apple Inc.The sale of its 5G RF chips and other wireless connectivity components. The agreement shows that Apple will remain one of Broadcom's top customers even as it develops its own first-party chips to reduce its reliance on third-party chipmakers.

Analysts expect Broadcom's FY2024 revenue and adjusted EPS to grow by 41% and 11%, respectively, as a result of the VMware upgrade. After this big acquisition, Broadcom's revenue growth will slow down, but the stock is still valued at a reasonable multiple, with a forward earnings yield of 28x. The company's forward earnings yield of 1.6% and dividend payout ratio of 71% are not bad.

3. Oracle Corporation

Oracle is one of the world's largest database software companies. Over the past decade, Oracle has transformed many of its on-site applications into cloud-based services and expanded its ecosystem with more enterprise resource planning (ERP) and cloud infrastructure services. This cloud-driven transformation has helped Oracle stay relevant and continue to grow its revenue. Over the past decade, Oracle has also repatriated a significant amount of its overseas cash back home, purchasing nearly 401 TP3T of stock.

In fiscal 2023 (ended last May), Oracle's revenues grew by 18% (organic growth of 7%) and adjusted EPS grew by 4%. for fiscal 2024, analysts expect its revenues and adjusted EPS to grow by 7% and 9%, respectively.

Oracle plans to continue to expand its cloud services division to counteract the impact of slower growth in its internal deployment, licensing and support divisions. Oracle also expects to see an uptick in the use of its back-office databases and ERP applications, an expansion of the generative AI capabilities of its cloud infrastructure platform, and a significant increase in the use of its cloud infrastructure platform withNvidia) signed a new AI infrastructure contract that will drive its near-term growth.

Oracle may be profiting from the expansion of the artificial intelligence market, but its shares still look cheap at 19x forward earnings. Oracle's forward yield is 1.3%, and its low payout ratio of 42% leaves plenty of room for future dividend growth.

Should you invest $1,000 in Dell Technologies right now?

Consider the following before purchasing Dell Technologies, Inc. stock:

Motley Fool Stock AdvisorA team of analysts have just selected what they believe to be the most popular analysts in the world at the moment.-est (superlative suffix)The name of the person is suitable for the investor to purchase10Only the stock ...... Dell Technologies was not included. The 10 stocks that made the list could generate huge returns over the next few years.

Consider April 15, 2005Nvidia) when it was on the list ...... If you invested $1,000 at the time of our recommendation.You will have 540,321dollar! * *The

Stock AdvisorProvides investors with an easy-to-follow blueprint for success, including guidance on building an investment team, regular updates from analysts and two new stock picks each month. Stock Advisor The service has contributed to the S&P 500 Index's return since 2002.translate twiceMuch*.

View 10 Gift Certificates

*Stock Advisory Rates as of April 8, 2024

Leo Sun has a position in Apple.The Motley Fool recommends Apple, Nvidia and Oracle.The Motley Fool recommends Broadcom.The Motley Fool has a disclosure policy.

3 Dividend-Paying Tech Stocks to Buy for April was originally published by The Motley Fool.