3 Tech Giants With Attractive Dividends That You Should Buy

The Federal Reserve most likely won't raise interest rates for the remainder of the year so dividend-paying stocks are still an investor's best bet for income.

Qualcomm (QCOM) , Cisco (CSCO)  and Philips (PHG) are three tech giants with yields greater than 3% and a history of innovation and growth. Expect these companies to continue driving earnings and dividend growth in 2017.

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1. Qualcomm

Qualcomm is a leading provider of wireless technology and services for mobile devices and in developing and commercializing Code Division Multiple Access (CDMA) technology. The firm is among the leaders in producing key component parts for top smartphones, including Apple's iPhone and Samsung's S-Series, as well as tablet PCs.

Qualcomm is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells QCOM? Learn more now.

Despite increased competition from Intel, Qualcomm is still in a leading position in the mobile chip market. It is well-positioned to benefit from consumers upgrading to newer, faster smartphones.

Global market penetration for smartphones is still low compared to the developed world, so there is room for more global consumers to switch from older cellphones with less functionality to smartphones. Management expects this trend to boost annual growth of devices sales containing Qualcomm's chips by more than 20% over the next few years.

Although management is more focused on investing profits in innovation, R&D, acquisitions and organic growth rather than boosting payouts, the company does offer a good yield of about 3.2%.

2. Cisco Systems

Since its inception in 1984, Cisco Systems has become a global leader in the tech sector by delivering intelligent networks and technology architectures built on integrated products, services and software platforms.

Cisco is among the market leaders in web technology sales for seven different types of technologies including: routing, tele-presence, wireless LAN, switching, voice, web conferencing and security. Its global operations generate about $49 billion in annual revenue with around 40% of its total sales coming from outside the U.S. 

In 2015, the company spent $5.9 billion on R&D to develop new products and services, which showed that management was still committed to long-term growth and innovation. Cisco owns more than 16,000 patents and the company has made more than 150 acquisitions in its history to further fuel growth. It has been allocating more company resources to internet growth in areas like cloud computing.

The company's dividend yield is 3.3%.

3. Philips

With Philips we find an established technology firm with both income safety and the potential for share price growth. Philips is benefiting from the rising tide of aging baby boomers worldwide.

The company's largest division, representing about 46% of revenue, sells diagnostic imaging systems, image-guided therapies (used to make surgeries less invasive and more precise) and consulting services. Philips has locked down sales for these systems through profitable long-term agreements with hospitals.

The company's dividend yield is 3%.

The company is also a leader in consumer lifestyle products, such as electric shavers and toothbrushes, diversifying its earnings. Philips also continues to have a sizable stake in its century-old lighting business.

Moreover, Philips is one of the world's few companies that has mastered reverse innovation -- developing products for emerging market consumers with tighter budgets and then selling those same products to developed economies at higher profit margins.

Philips's global footprint lets it take advantage of reverse innovation because the company operates in so many countries that are at different levels of economic development. For example, in 2008, Philips India bought India-based companies Alpha X-Ray Technologies and Meditronics, expanding its health care business to cater to the mass market for cardiovascular and general X-ray systems. As a result, Philips not only sells lower-priced equipment in India and other developing markets but in developed markets, too.

The firm's strategies have been paying off. In the third quarter, it reported a comparable sales rise of 2% and an 8% increase in equipment orders. The Personal Health and Diagnostics divisions grew 7% and 6%, respectively. 

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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