3 Dividend-Paying Tech Stocks to Add to Your Portfolio Most investors know that tech stocks can offer the potential for huge gains. But what they may not know is that some tech stocks also offer dividends....

Most investors know that tech stocks can offer the potential for huge gains. But what they may not know is that some tech stocks also offer dividends. This means investors can get the best of both worlds, income and capital appreciation. Cisco Systems (CSCO), International Business Machines (IBM), and Intel (INTC) are three such stocks and worth a look this month.

Plenty of investors are unaware that some solid tech stocks pay decent dividends. So don't assume value stocks and REITs are the only dividend-paying stocks worth holding. Take a long, hard look at the lengthy list of dividend-paying stocks, and you will find more than a couple of tech names.

The challenge lies in balancing the risk inherent to a tech investment with the prospect of a nearly guaranteed dividend. Though dividend payment is not absolutely guaranteed, it is highly likely. It is a successful investment as long as the stock maintains its value and the dividend outpaces inflation. Gains in the share price are a bonus.

Let's shift our attention to dividend-paying tech plays. Cisco Systems (CSCO), International Business Machines Corporation (IBM), and Intel Corporation (INTC) are three of the top tech stocks that pay respectable dividends.

Cisco Systems (CSCO)

CSCO, a global IT leader, pays a dividend of 2.63%. CSCO has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. The stock has a Quality Grade of A and a B in the Stability Grade. We also provide Growth, Value, Momentum, and Stability grades for CSCO, which you can find by clicking here.

Out of the 56 stocks in the Technology - Communication/Networking industry, CSCO is ranked sixth. You can find other top stocks in this industry by clicking here. Out of the 28 analysts who have issued recommendations for CSCO, five rate CSCO a Strong Buy, and half a dozen view it as a Buy.

CSCO is also intriguing simply because its low forward P/E ratio of 16.61 indicates it is undervalued at$56.01 per share. CSCO has a 52-week high of $56.62, while its low is $35.28.

International Business Machines Corporation (IBM)

IBM, an IT business, rakes in revenue through financing, tech services, systems, software, and business services. Headquartered in Armonk, NY, IBM pays a dividend of 4.57%. IBM has a low forward P/E ratio of 13.25. This ratio is lower than most other tech stocks, meaning IBM is underpriced at $142. The stock has a 52-week high of $152.84 and a 52-week low of $105.92.

IBM has an overall grade of B and a Buy rating in our POWR Ratings system. The stock has grades of B in the Quality, Momentum, and Value components. You can find out how IBM performs in the rest of the components, including Sentiment, Stability, and Growth, by clicking here.

Out of the 45 publicly traded companies in the Technology - Hardware industry, IBM is ranked 15th. You can find other top stocks in this industry by clicking here.

Intel Corporation (INTC)

INTC, one of the top semiconductor chip specialists globally, pays a dividend of 2.6%. The company's advanced integrated digital products are used for computers and other communications devices. INTC has a low forward P/E ratio of 11.16, which indicates the stock is undervalued at $52.69. INTC's 52-week high is $68.49, while its 52-week low is $43.61. INTC has a beta of 0.60, which means it is much less volatile than the market.

Analysts have high hopes for INTC, setting an average target price of $62.54 for the stock. If INTC moves to this price target, it will have increased by nearly 16% in value. INTC is a POWR Ratings monster with an overall grade of A, translating into a Strong Buy rating. The stock has a Value Grade of A and Bs in the Stability, Momentum, and Sentiment components.

Investors can find out how INTC fares in the remainder of the components, including Quality and Growth, by clicking here. Nearly 100 stocks comprise the Semiconductor & Wireless Chip industry. INTC is ranked in the top 10, slotting in at number nine overall. You can find other top stocks in this industry clicking by here.

Click here to check out our Semiconductor Industry Report for 2021

CSCO shares rose $0.09 (+0.16%) in premarket trading Friday. Year-to-date, CSCO has gained 30.89%, versus a 18.24% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.

More...