Like Dividends? These 3 AI Stocks Pay Investors
But perhaps to the surprise of some, several stocks involved closely in the AI trade – Broadcom AVGO, Vertiv VRT, and NVIDIA NVDA – shell out dividend payments. For those interested in getting paid with some AI exposure, let's take a closer look at each.
Vertiv Continues Momentum
Vertiv provides services for data centers, communication networks, and commercial and industrial facilities with a portfolio of power, cooling, and IT infrastructure solutions and services.
Analysts have dialed their current fiscal year EPS expectations higher over the past year thanks to bullish results stemming from strong demand, with the current $3.56 Zacks Consensus EPS estimate suggesting 25% YoY growth.
Revenue estimates are bullish as well thanks to the red-hot demand, with Vertiv expected to see 18% YoY sales growth in its current fiscal year. While hares currently yield a modest 0.1% annually, the stock still reflects a strong play for those seeking a combination of growth and yield.
Below is a chart illustrating the company's sales on a quarterly basis.
Broadcom Posts Strong AI Revenue
Broadcom is evolving a broad portfolio of technologies to extend its leadership in enabling next-generation AI infrastructure. This includes foundational technologies and advanced packaging capabilities aimed at building the highest performance, lowest power custom AI accelerators.
The stock has long been a favorite among those seeking tech exposure paired with paydays, with the company's strong cash-generating abilities allowing it to consistently reward shareholders over its history.
The company has upped its dividend payout six times over the past five years, translating to a sizable 13.3% five-year annualized dividend growth rate. Below is a chart illustrating its dividends/share paid on an annual basis.
Please note that the final value in the chart is calculated on a trailing twelve-month basis.
Notably, AI revenue of $4.4 billion throughout its latest period showed big momentum, melting 46% higher year-over-year. Its cash-generating abilities also continued to remain strong, with free cash flow of $6.4 billion also reflecting a record and climbing 44% year-over-year.
Below is a chart illustrating the company's free cash flow on a quarterly basis.
NVIDIA Remains Prime AI Pick
Unrelenting demand for its Data Center products has provided NVIDIA with unprecedented growth over recent years. The AI favorite again came out with rock-solid results in its latest quarterly print, with Data Center sales of $39.1 billion climbing 73% from the $22.5 billion print in the same period last year.
Below is a chart illustrating NVIDIA's Data Center sales on a quarterly basis.
Like VRT, shares currently yield a modest 0.1% annually, a fraction relative to the S&P 500's yield of 1.2%. But while the yield may be muted, the stock remains the strongest play on the AI frenzy out there, providing a stellar blend of growth paired with income-generating abilities.
Bottom Line
Dividends come with great perks for investors, providing a passive income stream and the ability to maximize returns through dividend reinvestment.
Although all three dividend-paying tech stocks above – Broadcom AVGO, Vertiv VRT, and NVIDIA NVDA – aren't high-yield, the bullish outlook for these companies' AI offerings can't be overlooked by income-focused investors seeking the join the frenzy.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
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Vertiv Holdings Co. (VRT): Free Stock Analysis Report
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