International Business Machines Corp. (IBM), QUALCOMM, Inc. (QCOM), Cisco Systems, Inc. (CSCO): Forget About Rising Interest Rates With Growing Tech Dividends

Cisco Systems, Inc. (NASDAQ:CSCO)

Being the leading supplier of data networking equipment and software, Cisco Systems, Inc. (NASDAQ:CSCO) is in the right place to benefit from growing connectivity needs on a global scale. The company is also expanding into promising growth areas like software designed data centers, and it has the scale advantage and brand reputation to capitalize on the opportunities that may emerge in the future.

Online traffic is growing at an amazing speed as more people all over the world are gaining access to high-quality internet connection, especially in emerging countries. Besides, the mobile computing boom brings connectivity demands to a whole new level as users become engaged via multiple devices, practically anywhere and at any time. In addition to that, voice, video and data are increasingly demanding when it comes to traffic needs.

Furthermore, its 2.8% dividend yield is looking quite strong in terms of growth prospects. Management has committed to return 50% of free cash flow to shareholders on an annual basis, and the company has more than $47 billion in balance sheet cash. Coupled with strong secular tailwinds supporting earnings growth, this means that Cisco Systems, Inc. (NASDAQ:CSCO) will most likely continue increasing dividends over the next years.

Bottom line

Trying to time the markets by forecasting interest rates is a loser´s game. Instead of that, investors should better focus on buying high quality companies with strong fundamentals and growing dividend payments. Long term investing should be based on durable factors, and these three tech leaders are well positioned to outperform in the long term.

The article Forget About Rising Interest Rates With Growing Tech Dividends originally appeared on Fool.com and is written by Andrés Cardenal.

Andrés Cardenal owns shares of IBM and Qualcomm. The Motley Fool recommends Cisco Systems (NASDAQ:CSCO). The Motley Fool owns shares of International Business Machines (NYSE:IBM). and Qualcomm. Andrés is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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