Investors looking for strong dividend-paying companies often turn to defensive sectors like healthcare or utilities. It’s an understandable strategy: Companies in these sectors tend to perform better than most when the economy is in the dumps, allowing them to maintain their payouts even in bad times. Investors should be aware though that plenty of excellent dividend companies exist in other sectors, including the technology sector, which is often the favorite destination of growth-oriented investors.
With that as a backdrop, let’s look at two tech dividend stocks worth holding onto: Meta Platforms(NASDAQ: META) and eBay(NASDAQ: EBAY). Here’s why these two dividend payers are worth buying and holding for the next decade.
Meta Platforms, the parent company of Facebook, initiated its dividend payout last year. It now pays a quarterly dividend per share of $0.53, which at the current share price gives it a yield of 0.4%. That’s not terribly impressive — the average yield for companies in the S&P 500 is 1.3%. Still, Meta’s dividend program is in its early innings, and considering the company’s business strengths, it should reward its shareholders with growing payouts for years to come.
Meta Platforms remains the world’s leading social media company with an ecosystem of over 3 billion daily active users (DAUs). It generates steady revenue and profits thanks to its massive advertising business. Also, management is pouncing on meaningful long-term growth opportunities. It continues to invest heavily in artificial intelligence (AI) and its metaverse ambitions. These are not yet helping Meta Platforms generate massive revenue — some of its AI services, like its Meta AI virtual assistant, are free. But it is using AI to improve its services to advertisers which is likely to have a more immediate positive effect.
Meta Platforms is working to monetize its newer products. After it acquired WhatsApp more than 10 years ago, it took Meta years to figure out how to turn it into a profit center, eventually ramping up initiatives like paid messaging. Further, Meta Platforms benefits from a wide moat. The network effect across its websites and apps makes it challenging for competitors to steal its users.
That’s why even with more than 3 billion DAUs, Meta’s ecosystem keeps growing — and as long as it does, it will continue attracting advertisers. Lastly, Meta Platforms generates strong and growing cash flow.
The company could provide more than just strong growth in the next decade.
Growth-oriented investors might not be impressed by eBay right now. The e-commerce specialist’s revenue increased by just 2% to $10.3 billion in 2024. However, it has plenty of qualities that make it a solid stock to hold onto for the next decade. It is one of the pioneers of e-commerce. It has remained a notable player despite stiff competition from large companies with diversified operations — like Amazon — and smaller, niche players like Etsy. And eBay’s brand is intimately tied to the e-commerce industry.
It also benefits from network effects. Further, eBay has sought ways to improve its business that should pay off down the road. It has doubled down on focused categories — collectibles, luxury and other expensive items that are increasingly in high demand. These initiatives are pulling the company’s results in the right direction. Last year, eBay’s total gross merchandise volume (GMV) grew by a little over 1%, while in focus categories, GMV grew by 5%.
Elsewhere, eBay’s advertising business is also positively impacting its results. These higher-margin efforts should allow eBay to generate profitable growth for the foreseeable future and help it maintain its steady dividend program through the next decade. It offers a quarterly payout of $0.29 per share, which at the current share price gives it a yield of 1.9%. Management has increased its payouts by an impressive 81.25% in the past five years. As such, eBay looks like a top income stock for tech investors.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Prosper Junior Bakiny has positions in Amazon and Meta Platforms. The Motley Fool has positions in and recommends Amazon, Etsy, Meta Platforms, and eBay. The Motley Fool has a disclosure policy.
