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.
Photo by Annie Spratt on Unsplash
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.
8. Texas Instruments Incorporated (NASDAQ:TXN)
Number of Hedge Fund Holders: 69
Texas Instruments Incorporated (NASDAQ:TXN) is an American semiconductor company that specializes in analog and embedded chips. The company has been focused on disciplined capital allocation over the past year. This includes ramping up spending on R&D and expanding its production facilities, all while aiming to maintain stable free cash flow. Thanks to this balanced approach, the company has managed to increase its dividend in a measured and sustainable manner over the years.
Texas Instruments Incorporated (NASDAQ:TXN) is widely regarded as a reliable dividend payer, supported by strong cash generation, a historically low payout ratio, an attractive yield, and consistent dividend growth. Over the trailing twelve months, the company reported $6.2 billion in operating cash flow and $1.7 billion in free cash flow, with free cash flow accounting for 10.7% of its total revenue. During the same period, Texas Instruments returned $6.4 billion to shareholders through dividends. While its payout ratio currently exceeds 100% on a TTM basis, the five-year average stands at 66%, pointing to a strong and stable financial foundation.
Despite significant investments in both R&D and capital expenditures, the company has continued to raise its dividend over the years, reflecting the resilience of its cash flow. Currently, Texas Instruments Incorporated (NASDAQ:TXN) pays a quarterly dividend of $1.36 per share, unchanged from its prior payout. Its most recent increase came in September 2024, marking the 21st consecutive year of dividend growth. With just four more years to go, the company is on track to join the ranks of Dividend Aristocrats. Its dividend yield comes in at 2.74%, which is higher than the average yield of tech stocks.
7. Analog Devices, Inc. (NASDAQ:ADI)
Number of Hedge Fund Holders: 79
Analog Devices, Inc. (NASDAQ:ADI) is an American semiconductor manufacturing company that develops and markets integrated circuits, software, and subsystems for a range of industries, including automotive, healthcare, and consumer electronics.
Analog Devices, Inc. (NASDAQ:ADI) has earned a reputation as a reliable dividend payer in the tech industry, largely due to its strong cash position, which has supported consistent dividend growth. Over the past five years, the company has increased its dividend at an average annual rate of nearly 11%, which is an impressive pace, particularly in a sector where dividend growth isn’t typically a priority. ADI has now raised its dividend for 21 consecutive years.
Analog Devices, Inc. (NASDAQ:ADI)’s ability to maintain and grow its dividend is underpinned by solid cash generation. Over the trailing twelve months, ADI reported $4 billion in operating cash flow and $3.3 billion in free cash flow, accounting for 39% and 34% of its revenue, respectively. In the second quarter of 2025 alone, the company returned $700 million to shareholders through a combination of dividends and share buybacks. The stock supports a dividend yield of 1.73%, as of June 22.
The company’s strong and consistent business model has supported its ability to return 100% of free cash flow to shareholders over the long term. Over the past 21 years, Analog Devices, Inc. (NASDAQ:ADI) has distributed more than $13 billion in dividends and repurchased around $16 billion worth of its common stock. At the same time, the company has continued to invest heavily in its advanced product lineup, flexible hybrid manufacturing capabilities, and customer-focused service approach. The efforts are expected to further strengthen its capacity to generate attractive cash returns going forward.
6. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 82
Cisco Systems, Inc. (NASDAQ:CSCO) is an American multinational digital communications technology company, headquartered in California. The company offers a wide range of networking hardware, software, and telecom equipment.
Cisco Systems, Inc. (NASDAQ:CSCO) has a strong dividend history, having raised its payouts for 18 consecutive years. While the company’s revenue growth over the past decade has been modest— averaging between 1% and 3%—its consistent cash generation has supported its ability to maintain and gradually raise dividends. In the third quarter of fiscal 2025, Cisco reported operating cash flow of $4.1 billion, reflecting a 2% increase year-over-year. The company returned $3.1 billion to shareholders during the quarter through dividends and share repurchases.
Cisco Systems, Inc. (NASDAQ:CSCO)’s acquisition strategy also plays a supportive role in its dividend policy, especially when these acquisitions contribute positively to cash flow. A prime example is the company’s 2024 acquisition of Splunk, which added approximately $1.4 billion to its fiscal 2024 revenue.
In terms of payout ratio, Cisco Systems, Inc. (NASDAQ:CSCO) remains on solid ground. Its five-year average payout ratio sits at 56.6%, suggesting that the company retains enough flexibility to continue rewarding shareholders while investing in growth. It currently offers a quarterly dividend of $0.41 per share and has a dividend yield of 2.47%, as of June 22.
5. QUALCOMM Incorporated (NASDAQ:QCOM)
Number of Hedge Fund Holders: 82
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based multinational company that creates semiconductor software and services related to wireless technology. The company is increasingly catching the eye of income-focused investors thanks to its ability to strike a balance between technological innovation and steady income distribution.
QUALCOMM Incorporated (NASDAQ:QCOM) currently pays a quarterly dividend of $0.89 per share, following a 4.7% increase announced in March. This marked its 21st consecutive year of dividend hikes, putting it just four years away from achieving a prestigious Dividend Aristocrat status. While strong cash flow supports this dividend growth, it’s the company’s prudent payout ratio that truly supports its dividend strength. Over the past five years, QCOM has maintained an average payout ratio of 40%, and its trailing twelve-month figure is even lower at 34.6%. These numbers indicate ample financial flexibility for reinvestment, innovation, and rewarding shareholders.
In the most recent quarter, QUALCOMM Incorporated (NASDAQ:QCOM) spent $2.2 billion on research and development and distributed $938 million in dividends, demonstrating its ability to invest in growth while maintaining consistent shareholder returns. The company closed the quarter with $7.2 billion in cash and equivalents and reported $7.1 billion in operating cash flow, an increase from $6.5 billion a year earlier. As of June 22, QUALCOMM offers a dividend yield of 2.35%.
4. Applied Materials, Inc. (NASDAQ:AMAT)
Number of Hedge Fund Holders: 83
Semiconductor stocks have delivered solid long-term returns, but investors need to be selective. Among the equipment suppliers, Applied Materials, Inc. (NASDAQ:AMAT) stands out for its broad diversification and consistent dividend policy. With artificial intelligence driving long-term demand, the company is emerging as a compelling option for dividend growth investors.
Earlier this year, on March 10, Applied Materials, Inc. (NASDAQ:AMAT) announced a 15% increase to its quarterly dividend, raising it to $0.46 per share. This marks the eighth straight year of dividend hikes. Alongside this, the board approved a new $10 billion share repurchase program, which adds to the $7.6 billion still available under the existing authorization.
Applied Materials, Inc. (NASDAQ:AMAT)’s financial position remains solid. In the most recent quarter, it generated $1.57 billion in operating cash flow and returned $325 million to shareholders through dividends. Free cash flow came in at $1.06 billion. With a dividend payout ratio of just 19%, Applied is distributing only a modest portion of its net income, signaling plenty of room for future increases.
Applied Materials, Inc. (NASDAQ:AMAT) also holds a leadership position in etch and deposition tools, which are key technologies used in manufacturing high-performance logic chips and DRAM, both of which are in high demand due to the rapid expansion of AI. This market tailwind is expected to support both business growth and continued strength in shareholder returns. AMAT has a dividend yield of 1.09%, as of June 22.
3. Oracle Corporation (NYSE:ORCL)
Number of Hedge Fund Holders: 97
Oracle Corporation (NYSE:ORCL) is one of the best dividend aristocrat stocks in the tech sector. The stock’s shares recently hit a new high after a strong fiscal fourth-quarter earnings report. While the stock has already enjoyed significant gains in recent years, its rapid growth in cloud services continues to make it attractive, even at current highs. A key strength lies in the company’s ability to let businesses use their own data with AI large language models while ensuring data security, giving it a competitive edge.
Analysts also remain bullish. on Oracle Corporation (NYSE:ORCL). Dan Ives of Wedbush Securities, who recently launched an AI-focused ETF, highlighted software as a major area of growth within AI and sees Oracle as a central player in that trend over the next year.
This momentum also brings renewed attention to Oracle Corporation (NYSE:ORCL)’s dividend. Backed by a strong cash position— $20.8 billion in operating cash flow in FY25, up 12% from the previous year— the company has delivered consistent dividend payments since 2009. Over the past five years, it has increased its dividend at an average annual rate of over 12%. Oracle pays a quarterly dividend of $0.50 per share, with a yield of 0.97%, as of June 22.
2. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 158
Broadcom Inc. (NASDAQ:AVGO) is among the best dividend aristocrat stocks in the tech sector. The stock’s value has grown significantly in recent years thanks to its leadership in global connectivity and the rising demand for artificial intelligence (AI).
Broadcom Inc. (NASDAQ:AVGO) serves multiple end markets such as cloud infrastructure, networking, cybersecurity, storage, broadband, wireless, and hyperscale data centers. Its late 2023 acquisition of VMware further expanded its presence in infrastructure software.
Broadcom Inc. (NASDAQ:AVGO)’s core operations, including VMware, generate stable and consistent cash flow. Alongside its strong position in tech, the company also stands out as a reliable dividend stock, offering both income and growth potential.
The company’s solid cash position supports its ability to continue raising dividends. In the first quarter, it generated $6.1 billion in operating cash flow and, after $100 million in capital spending, reported $6 billion in free cash flow, equal to 40% of revenue. Broadcom Inc. (NASDAQ:AVGO) paid out $2.77 billion in dividends during the quarter, at $0.59 per share, marking 14 consecutive years of dividend growth. AVGO has a dividend yield of 0.94%, as of June 22.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 284
Microsoft Corporation (NASDAQ:MSFT) surprised Wall Street in 2003 when it announced its first-ever dividend, especially since the company was dealing with costly antitrust challenges at the time. Analysts viewed the move as a smart step, both financially and strategically. Today, the dividend is seen as one of Microsoft’s key strengths. What began as a $0.16 per share payout has since grown to $0.83 per share.
This level of dividend growth is particularly impressive for a company rooted in the growth-oriented tech sector. Microsoft Corporation (NASDAQ:MSFT)’s five-year dividend growth rate of 10.3% shows that it’s possible to balance both income and expansion.
While its 20-year streak of dividend increases often flies under the radar, especially with a yield of less than 1% at current prices, Microsoft Corporation (NASDAQ:MSFT)’s dividend outlook remains strong. The company has a healthy balance sheet, with more cash than debt and a low payout ratio, giving it plenty of room to continue raising dividends well into the future. In addition, the stock has delivered a return of nearly 955% in the past decade, outperforming the broader market, which returned just 183% during this period.
While we acknowledge the potential of MSFT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MSFT and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: 10 Best Dividend Stocks for a Bear Market and 10 Best Dividend Stocks to Buy for Dependable Dividend Growth.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email below.
