Tech Stocks Surge: Analysts Recommend Cheaper High-Dividends

Investors are urged to consider cheaper tech stocks for better dividends as growth expectations rise. Analysts recommend IBM, AT&T, and HP for their stability amidst current market conditions.

Date: 12-01-2025

AI Rating: 6

Stock Market Insights: The report stresses the importance of selecting stocks carefully in today's market, particularly those with higher dividends, as tech stocks have surged due to lower interest rate expectations.

Earnings Per Share (EPS): IBM's EPS grew at a compound annual growth rate (CAGR) of 13% from 2021 to 2023, and analysts anticipate a further CAGR of 5% from 2023 to 2026. This indicates a significant improvement in profitability for IBM. AT&T expects its EPS to grow at a CAGR of 5% from 2023 to 2026 as well.

Revenue Growth: IBM's revenue saw a CAGR of 4% from 2021 to 2023 and is projected to have a CAGR of 3% from 2023 to 2026. In contrast, AT&T's revenue growth is expected to be sluggish at a CAGR of only 1% during the same period. HP faces revenue challenges, having experienced a slowdown but is projected to see a 2% CAGR from 2024 to 2027.

Free Cash Flow (FCF): AT&T generated $16.8 billion in free cash flow in 2023, expecting it to grow to between $17 billion and $18 billion in 2024, which showcases its improved operational efficiency after streamlining operations.

Overall Market Position: These developments reflect investor sentiment towards stability and dividend yield in a fluctuating market. IBM, AT&T, and HP are positioned as potential buys, but the analysis suggests that investors should temper their expectations regarding revenue growth, especially for AT&T and HP.

Stocks: IBM T HPQ