2 Soaring Tech Stocks With Amazing Dividends
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While many high-flying stocks don't pay dividends at all, investors can still find attractive dividends within the sector. International Machines (IBM 1. 25%) and AT&T (T 0. 23%) are two...
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July 3, 2025
07:15 AM
The Motley Fool
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While many high-flying stocks don't pay dividends at all, investors can still find attractive dividends within the sector
International Machines (IBM 1. 25%) and AT&T (T 0. 23%) are two great examples
On top of solid dividends, both IBM and AT&T have been dering impressive gains to investors over the past few years
While the past doesn't predict the future, these two dividend stocks look attractive for long-term investors
Image source: Getty Images
IBM s of IBM have more than doubled over the past three years as the company's long-awaited turnaround finally materialized
IBM's bet on hybrid cloud computing, anchored by its acquisition of Red Hat and gress in artificial intelligence (AI), have led to consistent revenue and free-cash-flow growth
For 2025, the company expects to grow currency-adjusted revenue by at least 5% while ducing around $13. 5 billion in free cash flow
AI is turning into a big win for IBM
The company's dual focus on software and consulting is winning over enterprises, resulting in $6 billion in generative AI-related bookings so far
IBM's watsonx platform and its efficient Granite AI models are geared toward solving real-world blems for enterprise clients, and its consulting arm can construct AI solutions involving IBM and third-party ducts
IBM has kept dividend increases small in the wake of the $34 billion Red Hat deal
The dividend hike was just a penny, bringing the quarterly dividend up to $1
Even so, IBM's dividend looks attractive, with a yield of around 2
The company's dividend track record is tough to beat
As of this year, IBM has paid consecutive quarterly dividends since 1916, and it's increased that dividend annually for 30 years in a row
With free cash flow on the rise, IBM's dividend is set to consume less than half of the company's free cash flow in 2025
That leaves plenty of cash flow left over for debt reduction and other uses, and if free cash flow keeps growing, larger dividend hikes could be on the horizon
AT&T Since bottoming out in mid-2023, s of telecom giant AT&T are up around 110%
While investors had shunned the stock for years ing the company's failed media acquisitions and messy disposal of those assets, they've been warming back up to AT&T recently
Today, AT&T is focused on 5G wireless and fiber
The company has dered consistent wireless r growth over the past few years, and its fiber network is set for a major expansion
AT&T recently passed its 30 millionth fiber location, and it expects to double the network's reach by the end of 2030
The recent acquisition of Lumen's Mass fiber will help the cause
For 2025, AT&T expects mobility service revenue to grow by around 3%, consumer fiber revenue to surge by a mid-teens percentage, and free cash flow to top $16 billion
That free cash flow supports AT&T's dividend, which has become more sustainable as the company's results have imved
AT&T slashed its dividend when it spun off WarnerMedia, and it has kept its dividend payments unchanged since then
The current quarterly dividend is $0. 2775 per, which works out to a dividend yield of 3
AT&T will pay out around $8 billion in dividend payments this year, or roughly half of its free cash flow
While AT&T's dividend hasn't increased in years, a higher dividend could be coming soon
The company hit its debt-reduction goals this year and plans to resume repurchases in Q2
With less focus on debt reduction, a dividend increase could also be on the table
For investors looking for a safe dividend with a high yield, AT&T is a great choice
Timothy Green has positions in AT&T and International Machines
The Motley Fool has positions in and recommends International Machines
The Motley Fool has a disclosure policy.
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