Quoted from Barron’s:
The 10-year U.S. Treasury Note recently was yielding about 4%, up from around 2% a year ago—thanks to the aggressive rate-boosting regimen of the Federal Reserve, aimed at getting inflation under control.
Dan Genter, the CEO of Genter Capital Management, doesn’t expect a wave of payout cuts, though he foresees dividend growth slowing to the mid-single digit range from the high-single digits for the stocks he holds. “Across the board, it’s actually quite healthy,” Genter says.
The Intel dividend cut was widely expected, he says, and not a reflection of that industry or stocks overall. He points to a trio of technology stocks that he believes are sound options for income investors: Broadcom (AVGO), Microchip Technology (MCHP), and Texas Instruments (TXN).
Broadcom, which makes semiconductors, yields 2.9%. Genter considers its dividend secure, partly because the company “is in a very solid position with its market share and the advancing of its market share.” Broadcom in December declared a quarterly disbursement of $4.60 a share, up 12% from $4.10.
Microchip Technology yields 1.7%. It recently boosted its dividend by 9%, to 35.8 cents a share from 32.8 cents. Genter points out that the dividend accounts for roughly 20% of the company’s free cash flow, which he views as a reasonable and sustainable level.
Texas Instruments, which specializes in making analog chips used in autos, factory equipment, and other applications, yields 2.8%—on the high end for a technology stock. The company in September declared an 8% boost in its quarterly dividend, to $1.24 a share.