Yes, You Can Get Dividends in Tech: 3 Stocks With Yield + Upside

“High yield," "tech," and “upside” are three terms that investors rarely see together, but they clearly match the description of Texas Instruments (NASDAQ: TXN), Qualcomm (NASDAQ: QCOM), and Analog Devices (NASDAQ: ADI). 

According to Wall Street price targets, all three of these high-yield tech names have significant upside potential to the tune of 25% or more. Also, all three hold strong dividend yields of between 1.5% and 3%, which, in the context of the tech sector, are certainly high. For perspective, technology typically has the lowest yields of any sector, as demonstrated by the 0.6% yield of the Technology Select Sector SPDR Fund (NYSEARCA: XLK), far below the S&P 500’s average 1.1% yield.

So, what makes these stocks different? Let’s explore why analysts are bullish, what kind of dividend income they offer, and the total return potential that could be in play.

Texas Instruments: Double-Digit Upside With a 2.5% Dividend Sweetener

Texas Instruments currently offers a dividend yield of around 3%, making it one of the more income-friendly names in the tech space. 

The MarketBeat-tracked analyst consensus price target on Texas Instruments is $212, implying a potential 17% upside in the stock. However, bulls like Rosenblatt Securities believe shares could rise much further. After Texas Instruments' most recent earnings on July 22, Rosenblatt updated its $245 price target, implying a potential 36% upside over the next twelve months. Combined with the stock’s 3% yield, this forecast coming to fruition could result in a nearly 40% total return for Texas Instruments. 

Still, analyst opinions on the stock range widely. DZ Bank’s $158 price target implies a decline in the stock of nearly 13%. However, it is important to note that the majority of analysts who updated their forecasts after the company’s latest earnings placed a price target on the stock of $220 or higher. Achieving that level would result in a price return of around 22% and a total return of approximately 25%.

Qualcomm: Strong Cash Flow Supports Growing Payout and 30%+ Upside

Qualcomm yields approximately 2.4%, with a $3.56 annual dividend and a payout ratio of around 36%, signaling strong dividend sustainability. That yield reflects the company’s 4.7% increase to its quarterly dividend, announced back in April, underscoring its commitment to returning capital to shareholders.

The MarketBeat-tracked analyst consensus price target on Qualcomm is around $180, implying a potential upside of around 22% upside in shares. However, Wall Street analysts who updated their forecasts after the company’s July 30 earnings release see even more potential.

Several brokerages, including JPMorgan and TD Cowen, recently raised targets to the $185–200 range, but Rosenblatt tops the range with a $225 target. This breadth of uplift, plus dividend income, could yield total returns near 30%, not including the extra 2.4% return the stock could generate through dividends.

Qualcomm paid out $967 million in dividends last quarter, only around 37% of the $2.6 billion in free cash flow it generated. This robust free cash flow gives the company a solid ability to continue growing its dividend. 

Analog Devices: Undervalued Growth With a Reliable Dividend Boost

Chipmaker Analog Devices has a respectable dividend yield, both when it comes to the overall market and in tech, of nearly 1.8%. According to the analysts tracked by MarketBeat, the consensus price target on Analog Devices is around $260, implying an upside potential of approximately 17%. However, recent analyst updates paint a much more bullish picture.

In July, several analysts raised their targets, with the average climbing to $285, indicating a potential upside of nearly 29%. Factoring in the dividend, this points to a potential total return above 30% over the next year. These upgraded forecasts are tightly clustered, ranging from $270 to $300, reflecting a strong consensus that the stock remains undervalued.

Investors will get a clearer picture soon, as Analog Devices is scheduled to report earnings on August 20. This could further influence analyst sentiment and price targets.

TXN, QCOM, ADI: Income, Tech, and Upside Potential

Finding tech stocks with high dividend yields and upside isn’t easy. However, Wall Street analysts seem to be seeing this combination of characteristics in Texas Instruments, Qualcomm, and Analog Devices. These companies could offer investors a solid opportunity to play the recovery while also getting a nice bit of income.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "Yes, You Can Get Dividends in Tech: 3 Stocks With Yield + Upside" first appeared on MarketBeat.