3 Undervalued Tech Stocks With Great Dividends to Buy Now

Interested in buying a tech stock? If so, Thomson Reuters Corp. (TSX:TRI)(NYSE:TRI), DH Corp. (TSX:DH), and Evertz Technologies Limited (TSX:ET) are very attractive options.

| More on:
The Motley Fool

As investors, it’s our ultimate goal to outperform the overall market each and every year. There are many ways to go about trying to do this, but one of the best and least-risky ways I have found is to buy stocks that are trading at inexpensive forward valuations and have high and safe dividend yields.

I’ve scoured the technology sector and selected one large cap, one mid cap, and one small cap that meet these criteria perfectly, so let’s take a quick look at each to determine which would be the best fit for your portfolio. 

Large Cap: Thomson Reuters Corp.

Thomson Reuters Corp. (TSX:TRI)(NYSE:TRI) is the world’s leading source of intelligent information for businesses and professionals, which it describes as “a unique synthesis of human intelligence, industry expertise, and innovative technology.”

At today’s levels, its stock trades at just 18 times fiscal 2016’s estimated earnings per share of US$2.04 and only 15.8 times fiscal 2017’s estimated earnings per share of US$2.32, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 41.9 and its industry average multiple of 24.4.

In addition, Thomson Reuters pays a quarterly dividend of US$0.34 per share, or US$1.36 per share annually, which gives its stock a yield of about 3.7%. Investors must also note that it has raised its annual dividend payment for 22 consecutive years, and its 1.5% hike in February has it on pace for 2016 to mark the 23rd consecutive year with an increase.

Mid Cap: DH Corp.

DH Corp. (TSX:DH) is one of the leading providers of financial technology to the world’s financial institutions, including lending, payments, enterprise, and global transaction banking solutions.

At today’s levels, its stock trades at just 14.2 times fiscal 2016’s estimated earnings per share of $2.63 and only 13.2 times fiscal 2017’s estimated earnings per share of $2.82, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 25.9 and its industry average multiple of 27.3.

In addition, DH Corp. pays a quarterly dividend of $0.32 per share, or $1.28 per share annually, which gives its stock a yield of about 3.4%. Investors should also note that it has maintained this annual rate since 2013.

Small Cap: Evertz Technologies Limited

Evertz Technologies Limited (TSX:ET) is one of the world’s leading manufacturers and marketers of video and audio infrastructure solutions for the television, telecommunications, and new-media industries.

At today’s levels, its stock trades at just 16 times fiscal 2016’s estimated earnings per share of $1.05 and only 15.7 times fiscal 2017’s estimated earnings per share of $1.07, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 17.6 and its industry average multiple of 17.3.

In addition, Evertz pays a quarterly dividend of $0.18 per share, or $0.72 per share annually, which gives its stock a yield of about 4.3%. Investors must also note that it has raised its annual dividend payment for eight consecutive years.

Which of these tech stocks belongs in your portfolio?

Thomson Reuters, DH Corp., and Evertz Technologies are three of the best long-term investment options in the tech sector. All Foolish investors should strongly consider initiating positions in one of them today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Joseph Solitro has no position in any stocks mentioned.

More on Dividend Stocks

grow dividends
Dividend Stocks

3 Canadian Stocks With a Real Chance of Doubling Your TFSA’s Value

Three outperforming Canadian stocks can help TFSA investors double their account balances.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Dividend Stocks

3 No-Brainer Stocks I’d Buy Right Now Without Hesitation

At any given time, the market may have certain stocks that offer a powerful combination of reliability, potential, valuation, etc.,…

Read more »

money cash dividends
Dividend Stocks

This 8.39% Dividend Stock Can Pay $100 Cash Every Month

Consider investing in this monthly dividend stock at current levels to lock in high-yielding monthly distributions to create a good…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

Here’s the Average TFSA Balance in 2024

The Bank of Montreal (TSX:BMO) says that the average TFSA balance is $41,510, far below the maximum.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

Investors: Here’s How to Make $1,000 Each Month in Retirement

Here's how you can easily make $1,000 in monthly passive income in retirement in Canada, without taking on too much…

Read more »

man touches brain to show a good idea
Dividend Stocks

3 No-Brainer TSX Stocks I’d Buy Right Now Without Hesitation

Three TSX stocks that continue to overcome massive headwinds and beat the market are no-brainer buys right now.

Read more »

calculate and analyze stock
Dividend Stocks

TFSA Investors: 2 Top TSX Dividend Stocks to Buy on a Dip and Hold Forever

These top TSX dividend stocks now offer attractive yields and big potential capital gains.

Read more »

grow money, wealth build
Dividend Stocks

1 Dividend Stock to Buy for Growth and Stay for a 5.5% Yield

This dividend stock has been rising higher, but more could certainly be on the way. Now is the time to…

Read more »