Technological Companies Increasing Dividends
According to this Globe and Mail article by David Parkinson, many major tech companies such as Microsoft, Apple and S&P have either introduced or substantially increased their dividends (money payed by the company to their shareholders via cheque) over the last few years.
A sector once known for their high spending on marketing, research, product development, etc. to try to gain profit, most major companies seem to be profitable enough now to be able to dole out large dividends to their shareholders as they have never before. Looking at statistics, the technology sector’s dividend pay out rate has risen 1.5% in the last decade. This makes it almost on par with the average financial sector payout rate, a sector known for its high dividends.
But what does this change really mean?
As Parkinson suggests in his article, perhaps this marks the movement of technology shares from being higher risk “roller coaster” investments to being safer, dependable investments with good return rates. As today’s society seems to grow more and more dependant on all forms of technology, his reasoning is not unfounded. What do you think? Are tech companies shifting from higher risk to low risk investments?