Tapping into Dividend-Paying Technology Stocks

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

Technology was the one of the few shining stars during the darkest days of the COVID-19 pandemic.

Advertisement.

Indeed, as a sizable percentage of the American population shifted into work-from-home mode, technology companies saw their earnings per share (EPS) sharply rise. Concurrently, the tech-heavy Nasdaq repeatedly hit new highs.

Since the start of 2020, the Nasdaq Composite has risen more than 50%. As the old saying goes, however, “what goes up must come down.”

Technology stocks then had a very weak first quarter in 2021, as investors started to move funds into value stocks and other companies that were leveraged toward the reopening of the economy. The result was an inevitable correction in the technology sector.

Advertisement.

This does not mean, however, that the sector should now be totally set aside. Technology is still in a growth pattern, as some of the trends that were occurring before the pandemic are now accelerating and some of the changes that were impelled as a result of the pandemic are now becoming permanent, or at least protracted.

Due to the recent pullback in the technology sector and the onset of earnings season, it is time to turn our attention to the First Trust NASDAQ Technology Dividend Index Fund (NASDAQ: TDIV)

In order to sift through the bounty of technology companies that are out there, this exchange-traded fund (ETF) tracks a dividend-weighted index of U.S.-listed stocks that provide regular payouts. All companies in the fund are weighted according to their dividend yield relative to other stocks in the portfolio, and then adjusted so that technology companies make up 80% of the fund. Telecom companies make up the other 20%.

Exclusive  George Gilder Discusses Blockchain, the Graphene Age and More in Interview on NYSE Floor

Some of this fund’s top holdings include Cisco Systems, Inc. (NASDAQ: CSCO), International Business Machines Corporation (NYSE: IBM), Microsoft Corporation (NASDAQ: MSFT), Apple Inc. (NASDAQ: AAPL), Broadcom Inc. (NASDAQ: AVGO), Oracle Corporation (NYSE: ORCL), Texas Instruments Incorporated (NASDAQ: TXN) and Intel Corporation (NASDAQ: INTC).

Advertisement.

This fund’s performance has been relatively strong, even when including the damage done by the COVID-19 pandemic. As of April 6, TDIV has been up 8.21% over the past month and up 12.30% for the past three months. It is currently up 12.39% year to date.

Chart courtesy of www.stockcharts.com

The fund has amassed $1.51 billion in assets under management and has an expense ratio of 0.50%.

In short, while TDIV does provide an investor with a chance to tap into the world of technology, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors always should conduct their due diligence and decide whether the fund is suitable for their investing goals.

Advertisement.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE


img
share on:

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader
LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader
LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener
LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program
LEARN MORE HERE

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader
LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor
LEARN MORE HERE

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle
LEARN MORE HERE

DayTradeSPY

DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops
LEARN MORE HERE