3 Top High-Yield Tech Stocks

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The tech industry tends to be less generous with dividend payments than other market segments such as consumer staples and utilities. However, if you know where to look, you can still find robust yields backed by strong businesses.

Below, three Fool contributors will look at a few standout tech stocks that promise investors healthy yields, plus a good chance at capital appreciation. Here's why HP (NYSE: HP), Activision Blizzard (NASDAQ: ATVI), and Corning (NYSE: GLW) deserve a spot on your income watch list.

An engineer working on a chip.
An engineer working on a chip.

Image source: Getty Images.

A fallen tech giant

Leo Sun (HP): HP's stock declined about 15% over the past 12 months as sales of its PCs and printers decelerated. The PC business struggled with long upgrade cycles, competition from mobile devices, and Intel's ongoing chip shortage throttling supplies of current-gen CPUs. The printing business faced soft hardware sales and rising competition from generic ink and toner suppliers.

However, that sell-off reduced HP's forward P/E ratio to 9 and boosted its forward dividend yield to 3.4%. HP spent just 7% of its free cash flow and 20% of its earnings on its dividend over the past 12 months, and it's raised that payout every year since it split with Hewlett-Packard Enterprise in late 2015.

The bears will argue that HP is cheap because the PC market is weak and competition from generic printer suppliers won't wane. However, PC shipments should improve once Intel resolves its chip issues later this year. HP is also scaling up its printing business with its acquisitions of Samsung's printing unit and office equipment dealer Apogee, as well as its introduction of industrial 3D printers.

HP is also aggressively expanding its printing supply subscription service, Instant Ink, to lock in customers and widen its moat against generic rivals. Operating margins at both the PC and printing businesses expanded sequentially and annually last quarter, thanks to tighter cost controls, and HP continues to spend most of its free cash flow on buybacks to boost its EPS growth. Therefore, HP might not rally over the next few quarters, but it's still an undervalued income stock for patient investors.

Gaming the system for a solid yield

Steve Symington (Activision Blizzard): Even with its solid annual $0.37-per-share dividend yielding roughly 0.8% at today's prices, you might not consider Activision Blizzard a "high-yield" tech stock in the traditional sense. But with shares down nearly 50% from their all-time high set last September, and keeping in mind the massively profitable video gaming titan has increased its payout each year since starting with a $0.15-per-share payment in 2010, investors betting on a rebound have a chance to snag an artificially high yield right now.