Nasdaq Research Update: Technology Sector Continues to Dominate Dividends
As Q4 earnings wrap up, it is clear that the technology sector continues to power greater returns to shareholders with strong dividends and buybacks fueled by large cash balances, strong earnings, and topline revenue growth.
The Nasdaq Technology Dividend Index is the leading benchmark of dividend-paying technology companies. The index currently tracks 95 securities listed in the U.S. that are involved in technology or telecom.
On a weighted basis, the Nasdaq Technology Dividend Index’s current components have been dramatically increasing the total dollars paid out to shareholders via dividends from a level of $1.5 billion in 2011 to $2.1 billion in 2014 representing a 41% increase. While Apple, the world’s largest company by market capitalization, has become a noted dividend payer it is worth highlighting that excluding Apple from the Technology Dividend Index still results in a significant 36.7% increase during the same period.
Technology has very quickly become the preferred sector for dividends no matter if investors favor quality, yield, or growth. The Nasdaq Technology Dividend Index complements broad based dividend strategies that tend to be underweight in technology.
Currently, the top ten components represent 56% of the index and include highly recognizable names including Apple, IBM, Cisco and others. The top ten are displayed below along with their current weight, most recent dividend payment, and indicated yield.
Data as of February 11, 2015
Source: Nasdaq Global Indexes, Bloomberg, FactSet
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