These 5 tech stocks listed in the US have forward price-to-earnings (P/E) multiples below 10 times that pay dividends with significant dividend yields. This makes them suitable investments for bargain-hunting value investors.
The five are:
- HP Inc (HPQ) - This PC and printer company has a 2.7% dividend yield and a forward P/E of 8.2 times with a 16.7% FCF yield.
- Avnet (AVT): An electronics distributor with a 2.1% yield paid for the last eight years and a forward P/E of 7.1 times.
- KT Corp (KT): Korean telecom with a 5.2% yield paid for the last 6 years and a forward P/E of 6.6 times.
- United Microelectronics (UMC): Taiwan chipmaker with a prospective 4.4% yield, with a dividend paid for the last 10 years and a 7.9times forward P/E.
- Qualcomm (QCOM) - A major US telecom chip designer with a 2.2% yield and a forward P/E of just 10.5 times.
HP Inc (HPQ)
HP is s a low-tech company that has a decent 2.7% yield. It also has a consistent buyback program. Its annual $1.00 dividend is 23% of its $4.26 earnings per share (EPS) forecast for 2022. Moreover, HP has produced 11 consecutive years of dividend increases, as well as 32 years of continuous dividend payments.
Based on analysts’ estimates, HPQ stock trades for just 8.2 times forward earnings estimates.
Warren Buffett likes HP and recently took a large 11.4% stake in the company. HPQ stock is likely to be one of the top tech stocks to own with a P/E below 10x and pays a dividend.
Avnet is an electronics distributor that pays a $1.04 dividend annually. This gives it a 2.1% dividend yield. Moreover, Avnet has paid a dividend annually for the past 8 years.
Analysts forecast that it will make $6.85 this year, well more than the $1.04 dividend. Earnings will rise to $6.86 next year. So, at $48.60 AVT stock trades on a forward P/E of just over 7.1.
This is mainly due to the higher price of chips and other technology-related items, as well as higher logistics-related revenue. Avnet is one of the best cheap tech stocks to own that pay consistent dividends.
KT Corp (KT)
KT Corp is a South Korean telecom operator. It also provides broadband services, as well as media and content services. These include IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and other related services.
KT Corp pays one annual dividend each year. It recently declared its dividend on April 27 for 75.47 cents. It does not go ex-dividend again until Dec. 30, 2022, when the next dividend is declared in May of 2023. That gives it a dividend yield of 5.36% if the dividend next year is the same next year.
This is one of the few cases where the ex-dividend date is actually before the declaration date by 4 months. So if you buy the stock assume its dividend will be close to the prior dividend.
The stock has a forward P/E of 6.6 times, according to Seeking Alpha, and a 6.25x multiple according to Refinitiv. With its high dividend yield and low P/E, KT stock is the kind of bargain tech stock investors love.
United Microelectronics (UMC)
United Micro is a foundry semiconductor chip manufacturer with plants throughout the world. Like KT Corp, it pays a dividend once a year. However, the ex-date is after the declaration date, not before like at KT stock. Usually, the ex-date is in mid-July, so there is still time to get in on this year’s dividend.
Last year the dividend was set at 28.66 cents, giving it a 3.4% dividend yield. This year it's likely to be much higher this year. Here is why: its dividend payout was 34.5%, so assuming its EPS hits $1.12 this year, the new dividend could be 38.64 cents. So at today’s price of $8.83, UMC stock has a prospective yield of 4.38%.
Moreover, UMC stock has a forward P/E of just 7.9 times. That makes it one of the best stocks for bargain-focused investors.
Qualcomm is a mobile technology firm with a huge patent portfolio and high earnings power. Analysts forecast $12.59 in EPS this year, up 47.4% over last year. And for next year they estimate 5% higher earnings at $13.19. This gives QCOM a forward P/E of just 10.5 times.
Moreover, the dividend of $3 per share is less than a quarter of the $12.59 earnings projected this year. At today's price of $138.05, this gives it a 2.2% dividend yield.
Qualcomm has paid a dividend in each of the past 18 years. This makes it very likely that the company will keep doing this even if there is a recession. This makes it one of the best tech stocks to own with a low P/E and a good dividend yield.
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This is not financial advice and you should not rely on my analysis to buy or sell any stock. I am not undertaking to induce you to buy or sell any securities.
I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.