The Two Best Dividend Stocks to Buy in the Tech Sector

Microsoft, the world’s largest software maker by revenues, has paid dividends since 2003. It is believed to be a dividend haven, considering its sustained growth in payouts to investors.

Microsoft has recently restructured itself as ‘One Microsoft’. After the shake-up, the management wants to focus on major technology trends such as big data, cloud services and mobile devices. It has already acquired Nokia’s handset business, which accounts for 81% of its Windows Phone sales.
With the acquisition, Microsoft hopes to increase its share in the smartphone market to 15% by 2018. It also estimates that Nokia’s businesses will bring in $2.3-4.5 billion annually in operating income.

In the cloud services arena, Microsoft’s office 365 has an annual run-rate of more than $1.5 billion, and more than 350% growth in its seats. Windows Azure, its cloud services offering, is growing at a rate of 200%, with more than 50% of the Fortune 500 companies already using it. Owing to stellar growth in these areas, Microsoft has raised its capex guidance from $5.6 billion to $6.5 billion in 2014. The increased capex will go towards ramping up cloud services. Read more.

The Smartphone Industry – Are the Phones Getting Any Smarter?

Cellphones, once considered a luxury, are now a necessity for almost everyone. They have evolved from big, bulky, basic phones to highly sophisticated communication and entertainment devices. They are now capable of helping users make sophisticated decisions with the help of the cutting-edge technology embedded in them.

Apple Inc. (AAPL), more specifically the late Steve Jobs, is heralded as the pioneer of smartphones. Apple’s iPhone was introduced in 2007, and it revolutionized the cell phone industry and the world. The iPhone, with its completely touch- and gesture-based user interface, transformed the entire smartphone ecosystem.

Android, a mobile operating software developed by Google using an open source platform, was the next big thing in the industry. The introduction of Android and cheap Android powered devices led to the increasing adoption of smartphones across various categories of consumers. So much so that if the iPhone was responsible for revolutionizing the smartphone, then Android was responsible for commoditizing it. Read more.

The Gates Are Open for a New CEO!

Steve Ballmer, current CEO of Microsoft Corporation (MSFT), seemed upbeat when he announced major restructuring plans for the software giant in August. His announcement was followed by a major internal shake-up, which resulted in the transformation of Microsoft to ‘One Microsoft’. Microsoft’s different business divisions were replaced with departments based on their functionality. Following the shakeup, One Microsoft is to focus on creating a ‘family of devices and services’ rather than packaged software.

It came as a bit of a shock when, just a month after such a major transformation of the company, Ballmer announced that he was planning to retire. Ballmer had joined Microsoft in 1980 as the 30^th employee and the first business manager hired by Bill Gates himself. He took over from Gates as the company’s CEO in 2000.

His retirement has fueled speculation that he had been under intense pressure from Microsoft’s Board of Directors for not catching up to major industry trends. After all, it is no secret that stakeholders were holding him responsible for Microsoft’s lackluster performance. Read more.