Technology Replaces Banks as Better Dividend Bet for Investors
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Investors in the U.S. who used to rely on financial stocks for dividends can turn to an unlikely successor: information technology.
Companies in the IT industry eclipsed financials in total dividend payouts for the first time in the third quarter. That marks a change as IT companies generally have held onto cash so they could reinvest it in research and development or make acquisitions. Now, facing pressure from yield-starved shareholders, firms such as Cisco Systems Inc. and Microsoft Corp. are choosing to disburse some of that cash by introducing or increasing dividends.