3 Tech Stocks Yielding at Least 4% That You Should Be Following

By Markets Fool.com

High-yielding stocks are hard to come by -- especially as the broader market's yield is just 2%. Big dividends are even scarcer in the technology sector, where companies tend to hoard cash to use for acquisitions, to plow into research and development, or to ride out the next industry downturn.

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But there are a few tempting tech stocks that boast dividend yields at least twice the overall market's payout. Below, Motley Fool contributors make a case for three such investments: AT&T , Garmin , and Verizon .

Keith Noonan(AT&T):AT&Thas one of the strongest dividend profiles on the market, with 31 years of payout growth, and a stellar dividend yield. At roughly 5.2%, AT&T's yield comes in near the top of the tech sector, and the company's strong business foundations and policy of rewarding shareholders have made its stock a favored low-risk investment to hold for the long term. The last 12 months have seen AT&T gain roughly 8%, while the S&P 500 Index declined roughly the same amount; but the company's forward P/E ratio of roughly 13 suggests that the stock is still a good value even after significantly outperforming the market.

The company's entrenched position in telecommunications has helped it weather broader sell-offs in tech, and actually increased its valuation at a time when many other tech stocks have experienced steep sell-offs. In addition to its core wireless business, AT&T has been making key partnerships and acquisitions to create benefits across segments, with the company pointing to its merger with DirecTV as the source of technology and infrastructure advantages that will help the company beat chief rival Verizon in the 5G space.

AT&T is also investing in the cloud and other areas that see the company both branching out from, and augmenting, its core services. The company's massive wireless network positions it to be a big player in the Internet of Things connectivity, and partnerships with companies including Salesforce.com and Intel see AT&T testing the data-processing power of its IoT network, and readying its technologies for the demands of the future.

With a leading position in mobile network technology, and a fantastic dividend yield, AT&T is a tech stock that investors should be watching.

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(Garmin): Plunging demand for in-car GPS machines pushed Garmin's earnings down roughly 20% over the last year. Coincidently, the stock slumped by the same margin, which helps explain why the device maker's dividend yield just passed 5%.

Source: Garmin.

In exchange for that hefty payout, income investors will be exposing themselves to a few big risks. After all, sales aren't expected to grow in 2016, as the auto GPS market continues to contract.

Meanwhile, the $2.04 per share in dividends that Garmin will pay out accounts for more than 90% of the $2.25 per share of profit that management believes it will produce this year. That elevated payout ratio doesn't leave much room for income growth in the near future.

Yet Garmin's non-auto businesses are looking strong, so investors might find it an attractive option to gain exposure to fast-growing sectors like wearable tech. Garmin's fitness device segment jumped 16% higher last year, and the category is set to overtake automotive as its biggest product division soon. That's good news, because fitness boasts gross profit margins of 55% -- compared to 44% for the car division.

That 55% profitability soundly beats Fitbit's , which should come in at 49% in 2016. Yes, Fitbit is expected to grow sales by 40% this year, compared to Garmin's flat result. But more-conservative investors might prefer to pick up Garmin for its high yield and decent chance at steady, profitable growth.

(Verizon):In the world of dividend-paying stocks, Verizon could take on the nickname "Old Reliable." The wireless, Internet, and pay-television company has increased or maintained its payout every year since it began paying a dividend in 1984.

In fact, aside from a stretch between 1998 and 2004, when it kept the rate at $1.54 per share for the year, and 2005 through 2006 when it stayed at $1.62, the rate has inched up steadily.That's nine years of steady increases, and there is every reason to expect those numbers will increase this year, keeping the dividend yield over 4% even if the stock price rises.

There's nothing exciting about Verizon, but the company has done a good job marketing its core wireless business, making a major downturn of fortunes in the short term very unlikely. By pushing network quality -- which it actually delivers, according to RootMetrics, which consistently ranks it atop its twice-a-year study -- the company has built a durable franchise.

The same can be said in broadband, where it has steadily, albeit unspectacularly, grown its customer base. In cable, the company has experienced the same slow attrition through cord-cutting that the entire industry has, but the numbers have been a trickle, not a flood, and they more than made up for the gain in Internet subscribers.

Verizon is boring, but it's reliable. Not much is likely to change about its business for the next few years, and it's very unlikely the company would stop inching its dividend up, keeping it ahead of the 4% yield, where it has generally been during the last 10 years. This isn't a particularly dynamic stock, or a company that's likely to branch off into driverless cars, jetpacks, or drone-delivered snacks; but it's worth taking a look at because it's slow, steady, and reliable.

The article 3 Tech Stocks Yielding at Least 4% That You Should Be Following originally appeared on Fool.com.

Daniel Kline has no position in any stocks mentioned. Demitrios Kalogeropoulos has no position in any stocks mentioned. Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.