3 Dividend-Paying Tech Stocks to Buy Right Now
Technology companies are known for strong revenue growth fueled by their innovations, but that doesn't always translate to the bottom line. A number of tech companies are not profitable, but profits are a must in order to pay dividends. Otherwise, it should raise questions over the affordability of that dividend.
For example, data storage provider Seagate Technology (NASDAQ: STX) delivered an attractive yield of 3.7% at the time of this writing. But look past that juicy yield at the company's financials, and it's not a pretty picture.
In its fiscal first quarter, ended Sept. 29, Seagate paid out dividends of $145 million but suffered a net loss of $184 million. The company also generated free cash flow (FCF) of $57 million. FCF provides insight into the cash available for a company to invest in its business, pay debt obligations, repurchase shares, and hand out dividends. With no profit and a dividend payout more than double its FCF, Seagate can't sustain a payout if its financials don't improve.
Source Fool.com
