3 High-Yield Tech Stocks to Buy In April

Many investors associate the tech sector with high-growth stocks. However, the sector is also home to many blue chip stalwarts, which are owned for stability and income instead of aggressive growth. Those resilient stocks generally held up fairly well over the past year as rising interest rates drove investors from growth stocks to value stocks.

I believe investors should still buy some of those higher-yielding blue chip tech stocks in April as elevated inflation, high rates, bank failures, and other macro headwinds continue to rattle the markets. For me, these three reliable stocks check all the right boxes: Broadcom (AVGO 1.23%), Cisco Systems (CSCO 1.64%), and HP (HPQ 1.56%).

Adult working on laptop while child puts coins in a piggy bank.

Image source: Getty Images.

1. Broadcom

Broadcom produces a wide range of chips for the data center, networking, broadband, wireless, storage, and industrial markets.

Its top customer is Apple, which accounted for a fifth of its revenue in fiscal 2021 and fiscal 2022 (which ended last October). It also expanded into the infrastructure software market by acquiring CA Technologies in 2018 and Symantec’s enterprise security business in 2019. It’s currently in the process of buying the cloud software giant VMware.

In fiscal 2022, Broadcom’s revenue rose 21%. Its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 27%, and its free cash flow (FCF) increased 22% to £16.3 billion. Most of that growth was driven by the post-pandemic recoveries of the enterprise, data center, and industrial markets.

For fiscal 2023, analysts expect its revenue and adjusted EBITDA to both grow about 7% as it laps that growth cycle — but those estimates don’t account for its planned takeover of VMware yet.  Broadcom has a long history of expanding through acquisitions, but it still spent 44% of its FCF on its dividends over the past 12 months. It’s raised its payout annually over the past 13 years, and it currently pays an attractive forward yield of nearly 3%.

At 18 times forward earnings, it’s still an attractive bargain compared to many other tech stocks.

2. Cisco Systems

Cisco is the world’s largest producer of networking switches and routers. It also provides wireless equipment, cybersecurity tools, collaboration software, and other applications.

Cisco’s revenue and adjusted earnings per share (EPS) rose 3% and 4%, respectively, in fiscal 2022 (which ended last July), but it suffered a severe slowdown in the second half of the year. That deceleration was mainly caused by supply chain constraints, which temporarily throttled its production of networking hardware. Those headwinds also squeezed its gross margins with higher production and logistics expenses.

But for fiscal 2023, Cisco expects its revenue to rise 9% to 10.5% and for its adjusted EPS to grow 11% to 12% as it overcomes those challenges and satisfies the market’s pent-up demand for its products. Those are impressive growth rates for a stock that trades at just 14 times forward earnings. It also pays a forward dividend yield of 3.1%, and it’s raised its payout for 13 consecutive years.

It should have plenty of room for future hikes since it only spent 40% of its FCF on its dividends over the past 12 months. It’s committed to returning a “minimum of 50%” of its FCF to investors through dividends and buybacks over the long term — and that confident pledge makes it a rock-solid investment for conservative investors.

3. HP

HP is one of the world’s largest producers of PCs and printers.

Its consumer-facing business experienced a major growth spurt during the worst of the pandemic as more people upgraded their aging PCs for remote work, online classes, and more demanding video games. They also purchased more printers for DIY projects at home. But after the pandemic lockdowns passed, HP experienced a tough slowdown as those growth engines cooled off.

HP’s revenue dipped 1% in fiscal 2022 (which ended last October) as its adjusted EPS — which was buoyed by big buybacks — rose 8%. It didn’t provide an exact revenue forecast for fiscal 2023, but it expects its adjusted EPS to drop 5% to 16% as the market’s demand for new PCs and printers remains sluggish in the post-pandemic market. Analysts expect its revenue and adjusted EPS to decline 12% and 19%, respectively.

That outlook is grim, but HP is also streamlining its business by cutting thousands of jobs, eliminating redundant products, and expanding its subscription-based services. Those efforts could stabilize its growth, and its stock looks dirt cheap at less than 9 times forward earnings. HP has also raised its dividend annually since it spun off Hewlett-Packard Enterprise in 2015.

It spent just 49% of its FCF on dividends over the past 12 months, and it pays a hefty forward dividend yield of 3.8%. Those stable shareholder returns make it a reliable blue chip play for long-term investors.  Leo Sun has positions in Apple.

The Motley Fool has positions in and recommends Apple, Cisco Systems, and HP.

The Motley Fool recommends Broadcom and VMware and recommends the following options: long March 2023 £120 calls on Apple and short March 2023 £130 calls on Apple.

The Motley Fool has a disclosure policy.

Tags:

british-airways listed on couponmatrix.ukconrad-electronic listed on couponmatrix.ukgoddiva listed on couponmatrix.ukhoppa listed on couponmatrix.ukmainline-menswear listed on couponmatrix.ukmodern-milkman listed on couponmatrix.uk
british-airways listed on couponmatrix.ukTravel around the world on the British Airways global network. Hop across the pond to the US, discover the Far East, or discover everything Africa has to offer, all with British Airways. It’s never been easier to explore the world around us and your British Airways discount code means you can do so without breaking the bank! Book flights, hotels and more directly through their website and take care of your whole journey in one easy place.
conrad-electronic listed on couponmatrix.ukConrad is a leading retailer of electronics and technology products founded in 1923. It offers a wide range of products, from laptops and smartphones to TVs and cameras – all available for less with the latest Conrad discount code. Conrad stocks electrical devices of every variety to help both pursue pastimes and assist with much-needed repairs. So whether you’re in need of some new DIY tools, an electromechanical devices or a portable laptop for work, you’ll find all these and more at Conrad. At Groupon, we understand that saving money is important to our customers. That's why we work hard to find the best deals to cut the cost of every electronic item on your shopping list. We update our site regularly with the latest codes so that you can always get the best deal on your Conrad purchase. If you're eager to see which bargains the brand have to offer themselves, head on over to the Conrad sale section and save up to 30% on hairdryers, lightbulbs and plenty more. If you're looking for a great deal on Conrad electronics, then you've come to the right place. Conrad sources the best prices on everything from Apple MacBook's to electrical parts for cars and DIY, making them one of the most comprehensive elelctronics retailers on the web. There's no saying what new or replacement device you'll need next, so be sure to utilise Conrad voucher codes whenever you're in sudden need of quality electricals that don't break the bank.
goddiva listed on couponmatrix.ukIf you're looking for a sensational evening, party or other occasion dress then you need look no further than Goddiva. Everyone working at this wildly-popular store with its in-house design team lives, eats and breathes women's fashions - and our Goddiva discount code makes it all very affordable. There's no need to worry about sizing as you can make returns and exchanges incredibly easily, and deliveries are all made next day - so if you want to make a last-minute or impulse buy you'll be free to do so.
hoppa listed on couponmatrix.ukArrive happy with Hoppa, the transport search engine that’s dedicated to finding you the best-priced travel deals possible. Hoppa compares thousands of providers from all over the world so you can choose a travel solution that suits your needs perfectly. Kick-start your journey with Hoppa discount code and jump in a Hoppa shuttle or private car hire for less. Whether you’re looking for an economy option or something a little more luxurious, Hoppa can get you where you need to be.
mainline-menswear listed on couponmatrix.ukMainline Menswear offers functional and stylish apparel, fit for the most discerning of fashion conscious men. The store offers every composite part of a killer outfit, and stocks apparel by top brands such as CP Company, Aquascutum and Ralph Lauren. So if you've suddenly decided a new jumper would set off that outfit (it really would), a Mainline Menswear discount code can help you grab a noteworthy bargain.
modern-milkman listed on couponmatrix.ukModern Milkman is like the traditional delivery service of days gone by, with a twenty-first-century twist. Serving up everything from semi-skimmed cow’s milk to vegan oat milk, iced coffee milkshake to blueberry yoghurt, and croissants to pantry supplies, this is a milkman that does it all! Join the revolution with a Modern Milkman discount code, and start looking forward to up to three deliveries a week with the ability to manage your delivery from the website or app. Ironically, circling back to reusable glass bottles could be the future, which is why Modern Milkman embraces the circular economy and puts the planet over plastics.