SOURCE: The Bedford Report

The Bedford Report

December 06, 2010 08:46 ET

IT Companies Paying Higher Dividends

The Bedford Report Provides Analyst Research on Microsoft & Xilinx

NEW YORK, NY--(Marketwire - December 6, 2010) -  Dividend paying companies are attracting a lot of attention right now. Investors usually count on dividend paying stocks during hectic times in the market believing in the company's security and real earnings power. What investors likely were not counting on was for Information Technology companies to become popular dividend plays. IT stocks have a reputation for being "growth stocks" -- management had been more inclined to retain earnings and capture as much capital gain as possible for investors by reinvesting in the business instead of paying a dividend. However, with several IT companies showing an increase in cash flow and drop in capital needs, many firms have begun to raise or institute dividends. In fact, a recent report by Bloomberg claimed that companies in the IT industry eclipsed financials in total dividend payouts for the first time in the third quarter. The Bedford Report examines the outlook for dividend paying IT companies and provides research reports on Microsoft Corporation (NASDAQ: MSFT) and Xilinx, Inc. (NASDAQ: XLNX). Access to the full company reports can be found at:

Even with tech heavyweights such as Microsoft, Intel and Cisco making the decision to implement or increase dividend payments, for many tech firms, the idea of returning cash to shareholders remains taboo. Famously, or infamously, Apple has not paid a dividend since 1995. The topic once again came to the forefront after Bernstein Research hardware analyst Toni Sacconaghi sent a letter to Steve Jobs claiming that Apple's $46 billion cash appears "excessive by almost any measure."Apple and Jobs defend their lack of dividend by claiming that it is better for Apple to hold onto the cash hoard for potential acquisitions and "bold" investments. Apple has signaled no plans to change its financial structure, meaning it is not likely to implement a dividend or meaningful share repurchase program at this time. Apple may from time to time buy its shares to prevent dilution from stock-compensation share issuance.

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Microsoft recently raised its annual dividend payment to 64 cents a share for a yield of around 2.50%. Shares of Microsoft trade at roughly the same levels as they did eight years ago, and shareholders had been strongly pressuring the company to hike its dividend.

Xilinx also pays an annual dividend of 64 cents, with its yield being around 2.30%. For its fiscal first quarter, Xilinx sees revenue flat to down 4%, which would suggest revenue of $594.9 million to $619.7 million for the company.

The Bedford Report provides Analyst Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. The Bedford Report has not been compensated by any of the above mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at:

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