Dividend stocks are often attractive for investors. Recent events in the market have provided an excellent opportunity to get a hold of such securities since they may be available now at discounted prices. Discounted rates for dividend stocks enable investors to earn greater yields and more ROI.
Motley Fool analyst David Jagielski specifically points out International Business Machines ($IBM) and Walgreens Boots Alliance ($WBA). These stocks manage to pay more than the 2% average yield of the S&P 500. But their prices have fallen this year.
A Tech Dividend Aristocrat
Since tech stocks have advantages even in crisis situations, we can look at IBM. This is one of those stocks that is resilient to the pandemic. The company has been raising its dividend pay-outs for 25 years in a row. That makes it a dividend aristocrat. The company last raised its dividend in April to $1.63. . Since the stock is priced in the region of $125, an investor in the stock would have an approximate yield of 5.2%.
Since IBM has moved from a purely hardware focus to the cloud, it aids in remote working and communication which is essential for organizations in the pandemic era. It has also acquired Red Hat which runs Linux operating systems and is committed to open source software. The acquisition contributed to IBM registering a strong second quarter. Year over year sales have been up 17%. The June 30-ending quarter saw the company’s cognitive software and cloud business record a 3.3% rise. It stands at $5.7 billion now, though overall revenue slipped to 5.4% to close at $18.1 billion.
Company Segments Could Grow After the Pandemic
The company is continuing to witness growing demand for the cloud segment. The global technology segment is IBM’s largest though. Since this involves offering physical infrastructure support, the Covid-19 pandemic has understandably affected this part of the business. Despite that, the company is in an advantageous position. Once the pandemic has passed, all the company’s segments have the possibility of growing again. The company’s share price is down by over 9% year to date.
Since dividend stocks pay regular dividends to their investors, they provide a consistent stream of income. Companies paying dividends can have a great track record of performance and a solid potential for the future, otherwise, they would not be able to pay good dividends from their earnings. If you’re looking for great yields, stocks with growing dividend pay-outs could be the choice. They could also help in a long-term investing strategy, where you can look at the economy beyond the pandemic.
With an experienced online trading brokerage at your service, you may have the ability to make more advanced trading decisions.
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