New trade tariffs have placed the current bull market at risk. However, there are still growth tech stocks in the sector that could shield income-based portfolios. Tech companies that engage primarily in services or unique hardware should see minimal impact from worsening trade relations, and the following two stocks are among the best available to buy today.
Both have outperformed the average S&P 500 dividend for the year, and each has strong prospects moving into the final two quarters.
Cisco Systems Inc. (NASDAQ: CSCO)
Cisco develops networking technologies used by businesses and governments around the world. The company provides security solutions and networking hardware like wireless devices, routers and switches. With the expansion of internet services and the rollout of 5G networks, Cisco stands to grow its business over the next ten years.
Cisco’s management devices are used in all areas of network and internet delivery. Fiber, standard fixed line internet, cable, and wireless services are all covered by the company’s business units. Broad exposure and a strong brand name could see tech stocks revenue increase in the coming quarters.
Revenue grew by 2.76% in the 2018 fiscal year, but the big story here is in the company’s strong profit margin. Gross income increased 1.16% last year, for a profit margin of 63%. High profitability allows for excellent shareholder returns. The company reported free cash flow of $12.83 billion last year, and it’s currently paying a dividend of $0.35 per share for a yield of 2.62%.
Stock growth will also impress the bullish investors, with a 23.15% gain so far this year.
Tech Stocks AT&T Inc. (NYSE: T)
Holding company AT&T is one of the largest media and telecommunications service providers in the United States. With interests everywhere from film and television to telephone line services, this company has strong exposure to both consumer and commercial markets.
AT&T’s stock price hasn’t outperformed the S&P 500 this year, but its dividend easily has. The dividend offered on this tech stocks is $0.51, providing a yield of 6.66% at today’s stock price. Any investor building a portfolio for income will see benefits in this stock.
AT&T has a solid business model with a high level of diversification. With its income derived primarily from American consumers and businesses, revenues should be largely protected from a trade war. Total sales revenue was up 6.39% in the 2018 fiscal year.
Income-Based Stocks Can Offer Protection
In a volatile market, the larger income stocks make a lot of sense. Both Cisco and AT&T are excellent choices for the late-stage investor that wants to generate income from proven growth stocks.
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