In this article, we will take a look at some of the best dividend aristocrat stocks in the tech sector.

There was a time when investors were drawn to tech stocks mainly for their growth potential. However, that trend is shifting, as these companies are now gaining attention for their dividend payments. This is a significant change, considering tech firms have historically prioritized reinvesting in innovation and expansion. Today, many tech companies are well-established, with solid business models, strong margins, consistent growth, healthy financials, and manageable debt.

According to S&P, about 39% of tech companies in the Composite 1500 index now pay dividends, a sharp increase from 28% in 2013. Tech has also become a major player in overall market dividend contributions. FactSet reports that tech companies now make up roughly 13% of total dividend payouts in the S&P Composite Index, second only to the financial sector, and possibly on track to take the lead.

Sam Buckingham, an investment manager at Abrdn Portfolio Solutions, noted that growth stocks with smaller dividends can be valuable for income funds looking to diversify across various sectors and investment styles. He mentioned that although these stocks usually begin with lower yields, they often have room for dividend growth in the future. When combined with more traditional income stocks, such as those in the utilities sector that provide higher starting payouts but slower growth, they can contribute to a more balanced portfolio. With that in mind, let’s explore some of the best dividend aristocrat stocks in the tech sector.

Our Methodology

For this list, we scanned the holdings of the S&P Technology Dividend Aristocrats Index, which tracks the performance of technology and technology-related companies that have raised their dividend payouts for seven consecutive years or more. Since these stocks belong to the tech sector, their dividend yields tend to be lower comparatively. From the index, we picked 10 dividend stocks that have garnered the most attention from hedge fund investors by the conclusion of Q1 2025, using data from Insider Monkey’s database. The stocks are ranked in ascending order of the number of hedge funds having stakes in them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10. International Business Machines Corporation (NYSE:IBM)

Number of Hedge Fund Holders: 57

Commonly known as Big Blue, International Business Machines Corporation (NYSE:IBM) is an American multinational tech company that offers a wide range of services, including hybrid cloud solutions. It’s considered one of the top dividend-paying companies in the tech sector, thanks to its consistent cash generation, solid yield, and long history of dividend growth. However, the company’s revenue growth has been somewhat uneven, which could be a point of concern for some investors.

On April 30, International Business Machines Corporation (NYSE:IBM) announced a quarterly dividend of $1.68 per share, marking a 0.6% increase from its previous payout. While the bump was modest, it extended the company’s streak of annual dividend increases to 30 consecutive years. This ongoing dividend growth is backed by robust cash flows. In the latest quarter, IBM reported $4.4 billion in operating cash flow and $2 billion in free cash flow, returning $1.5 billion to shareholders through dividends during the same period.

That said, International Business Machines Corporation (NYSE:IBM)’s top-line performance over the past five years hasn’t shown consistent acceleration. Its annual revenue increased from $57.3 billion in 2021 to $62.7 billion in 2024, which is a gradual climb that might fall short of expectations for those seeking rapid dividend hikes. Moreover, the company’s payout ratio over the trailing twelve months stands above 110%, which raises some concerns about the sustainability of its dividends.

Even so, the firm has been increasing its dividends at a more modest pace, likely in line with its cash flow levels and ongoing investment needs. This cautious approach could help preserve its dividend over the long run. Also, the company’s steady dividend payments and a yield of 2.4% provide a sense of reliability and income stability for long-term investors.

9. Accenture plc (NYSE:ACN)

Number of Hedge Fund Holders: 69

Accenture plc (NYSE:ACN) is a multinational tech company that offers information technology services and management consulting. The company is sometimes overlooked by dividend growth investors due to its broader focus on tech solutions. However, the company boasts a strong track record of dividend growth, which may appeal to growth-oriented investors seeking consistent returns.

As of now, Accenture plc (NYSE:ACN)  pays a quarterly dividend of $1.48 per share, following a substantial 14.7% increase in December 2024. This sharp rise was supported by the company’s solid cash position, which it anticipates will remain stable going forward. In fact, Accenture had already raised its dividend by 15.5% in 2022 and 15.2% in 2023. Over the past five years, its average annual dividend growth rate stands at 8.2%, which is a notable figure within the tech sector. This reflects the company’s commitment to gradually increasing shareholder returns.

Looking at its financials, Accenture plc (NYSE:ACN)’s cash flow further supports its dividend strategy. In the latest quarter, it posted $3.68  billion in operating cash flow and $3.52 billion in free cash flow. The company’s quarterly dividend payments amounted to $924 million. With expectations for even stronger free cash flow this year, the recent dividend hike appears well-supported. Accenture has consistently paid dividends since 2005, and its five-year average payout ratio of 40% suggests there’s room for continued growth without compromising financial stability.