Dividends and How dividend investors can tap emerging world of 5G and AI

If you look at the ads from the telecom companies, they are urging you to upgrade your smartphone to take advantage of 5G networks. You may or may not upgrade, but you will want to have some money invested in companies that ensure 5G and Artificial Intelligence AI are being used. There are different avenues including index funds which include computer chip makers, but if you want to own the company and some of them have performed well (full disclosure: I own some shares of Nvidia).

Scott Clayton of TSI Network examined the computer chip makers to help narrow the field, to do this his criteria was:

TSI uses a point system to help simplify decision making.

1 point for 5 years of continuous dividend payment, 2 points for more than 5 years

2 points if company has raised the payment in the past 5 years

1 point for management’s commitment to dividends

1 point for operating in non-cyclical industries

1 point for limited exposure to foreign currency rates and freedom from political interference

2 points for a long term record of positive earnings and cash flow sufficient to cover dividend payments

1 point for an industry leader

Company Div Sustain Points Mtk Cap Div 1 Yr Total Recent

Rating ($ mil) Yield Return % Price

Intel Above Aver 8 212.7 2.6 -3.5 50.37

Texas Instruments Above Aver 8 128.8 2.6 8.8 139.68

Taiwan Semicond (ADR) Above Aver 8 445.2 1.7 86.4 83.13

Nvidia Above Aver 8 320.6 0.1 177.8 500.58

Broadcom Above Aver 7 148.4 3.5 27.2 367.04

Qualcomm Above Aver 7 131.5 2.3 46.8 114.56

Analog Devices Above Aver 7 42.8 2.2 0.3 115.56

These above companies dominate the industry

Intel is the world’s biggest maker of chips for PCs and severs

Nvidia leads in graphics and multimedia chips

Texas Instruments sells chips and electronic products worldwide

Qualcomm focuses on wireless devices

Taiwan Semiconductor makes chips for others including Apple, Qualcomm and Broadcom

Linking to dividend paying stocks, whether you do a point system or not, you need to narrow the field because most of us can not buy everything if we want to own the individual stocks. In this case the most important points are along the lines how safe is the dividend? very safe, then if you expect to buy and hold, then markets will do what markets will do expect they do like profitable stocks. Often the total return relative the risk you take is low and that is a good thing to expect and see in your account.

There are more questions than answers, till the next time – to raising questions.

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