Accenture Plc (NYSE:ACN) is being hurt by the same factors affecting IBM, lackluster corporate spending has produced disappointing sales growth at this global leader in consulting and technology services. However, just like IBM, Accenture has a remarkably profitable business model which generates plenty of cash flows for shareholders, operating margin increased to more than 14% of sales in the last quarter.
Accenture is a truly global company with more than 200 offices in 53 countries; it serves 89 of the Fortune Global 100 and more than three quarters of the Fortune Global 500 members. The company has been an early mover in the global outsourcing trend and it has built a leadership position in that business over the last years.
Management has a strong commitment to capital distributions, not only when it comes to dividends but also via share buybacks. Accenture has reduced its share count by more than 27% over the last ten years and it has a remaining authorization to repurchase approximately $3.0 billion in stock.
The company has a rock solid balance sheet with $5.9 billion in cash and equivalents and no debt, and the payout ratio is remarkably low at 16.4% of earnings. Accenture has a relatively young history of dividend increases with 8 years of growing dividend in a row, but the company has the fundamental strength to continue raising payments for years to come.
The tech industry has changed over the last years and many companies have built reliable business models generating big and recurrent cash flows for shareholders. When it comes to looking for the best dividend growth stocks for your portfolio, these three technology companies deserve some serious consideration.
The article 3 Tech Companies for Dividend Growth Investors originally appeared on Fool.com and is written by Andres Cardenal.
Andres Cardenal owns shares of IBM and Qualcomm. The Motley Fool recommends Accenture. The Motley Fool owns shares of International Business Machines and Qualcomm.
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