A number of academic and other studies have reported that companies that pay a steady and ample dividend have historically outperformed the stock market. A dividend is believed to instill a disciplined management style to the company leaders and keep them from foolishly pursuing acquisitions or other activities that might destroy shareholder value. The technology industry hasn't historically embraced dividend payments, choosing instead to acquire rivals or even store billions of excess liquidity on their balance sheets. Currently, the average dividend yield for the industry is rather paltry at 1.6% and below the current market average of 2.2%. Below are five tech stocks that have above-average yield and also look appealing as investment candidates.

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Computer Sciences Corp. (NYSE:CSC), or CSC for short, is an information technology (IT) and professional services firm. Its current dividend yield is 3.3%. The company specializes in serving the public sector such as the federal government, as well as state and local agencies. This lends itself to stable sales trends and served the firm well during the Great Recession. Reported profits have been more erratic and due to non-cash related charges, but cash flow generation has been relatively steady and has easily covered the annual dividend payout.

SEE: Cash Flow Indicator Ratios: Dividend Payout Ratio

CA Technologies (Nasdaq:CA) currently sports a very ample dividend yield of 4.1%. Its primary business, at roughly 60% of total sales, is to support mainframes for businesses throughout the world. It is technically an application software firm that helps client IT departments function and manage their data. Its business also sailed through the most recent economic downturn and cash flow easily covers the annual dividend. CA has also more than tripled its payout since 2011 as sales grow respectably and profits continue to expand nicely.

SEE: The Power Of Dividend Growth

Many investors have written off Garmin (Nasdaq:GRMN) as a has-been because navigation software, but it is now widely available in most smartphones for free. Sales have indeed struggled in recent years, but Garmin has been finding successful niches to sell its devices. These include the outdoor and fitness, such as for aviation and marine functions, including products that help outdoor enthusiasts find ideal fishing conditions. Sales are expected to be flat over the next couple of years, but profits are growing and can easily support a current dividend yield of 4.7%.

Semiconductor giant Intel (Nasdaq:INTC) is projected to log total sales of nearly $56 billion this year, but will still be able to achieve mid-single digit annual sales growth over the next couple of years. Over the past two years, it has reported free cash flow of more than $10 billion and pays out only roughly a third of this as dividends. The current annual dividend yield is 3.2% to exceed both the industry and market averages. Combined with around $15 billion sitting in cash on the balance sheet, Intel should be able to achieve decent operational growth and grow its dividend over time.

SEE: 3 Reasons To Buy Dividend Stocks Video

Rogers Communications (NYSE:RCI) is the second highest dividend payer of the group. It currently pays a 3.9% dividend yield. Rogers may not be a household name in the United States, but it is the largest provider of 4G broadband services in Canada. Cell phone penetration in Canada still lags its southern neighbor, so there appears to be ample room for Rogers to continue to grow sales and support its dividend payout.

The Bottom Line
There are solid options for investors in the technology industry to combine above-average dividend yields with companies that are profitable and should grow shareholder value in the coming three to five years.

At the time of writing, Ryan C. Fuhrmann did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Economics

    The 9 Industries Driving Texas' Economy

    Find out which industries are driving the Texas economy. Learn about the largest and fastest growing employers and producers in Texas.
  2. Stock Analysis

    The Biggest Risks of Investing in Facebook Stock

    Find out what risks Facebook shareholders face in coming years, and why the social media giant may struggle to find new markets in the future.
  3. Stock Analysis

    The Biggest Risks of Investing in Apple Stock

    Read about the biggest risks facing Apple, Inc., and why AAPL investors should always be prepared for the day when the tech giant starts to struggle.
  4. Stock Analysis

    Will WYNN Continue to Rally?

    Wynn Resorts has experienced a rally recently. Will it remain a good bet?
  5. Stock Analysis

    Don't Be Fooled by the Market's Recent Rally

    The bulls won for a bit in early October, but will bears have the last laugh?
  6. Stock Analysis

    Will Twitter's Stock Find its Wings Soon?

    Twitter is an enigma to many investors, but its story is pretty straightforward.
  7. Investing Basics

    How to Think About Seasonality Trends

    Investors benefit when company research incorporates seasonality trends that predict relative strength and weakness throughout the calendar year.
  8. Stock Analysis

    8 Solid Utility Stocks for a Bear Market

    If you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
  9. Stock Analysis

    Why Phillips 66 (PSX) is a Solid Long-Term Bet

    Here's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
  10. Investing

    This New Trend Makes Robotics an Industry to Watch

    Robots created to work with humans, instead of taking their place, have the possibility to change the face of manufacturing across the globe.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!