With the strong demand for cutting-edge technologies across various industries like automotive, retail, and healthcare, the tech sector is well-positioned for robust demand and growth. Thus, it could be wise to invest in high-dividend, fundamentally sound tech stocks Upbound Group, Inc. (UPBD), Xerox Holdings Corporation (XRX), and American Software, Inc. (AMSWA) for steady returns.
The tech industry is growing rapidly, driven by continuous innovations and advancements in products to cater to the evolving demands of consumers across various segments. Gartner expects the overall IT spending to grow at 8% in 2024, surpassing $5.06 trillion. This trajectory puts worldwide IT spending on track to surpass $8 trillion before the end of this decade.
With rising demand for big data analytics, artificial intelligence, IoT, and cloud computing across various enterprises, the global digital transformation market is experiencing significant growth. The global digital transformation market is expected to hit $9.15 trillion by 2033, growing at a CAGR of 25.5% from 2024 to 2033.
In global comparison, the U.S. digital transformation market is predicted to value $2.94 trillion by 2033, at a CAGR of 26.1%.
Besides, with the staggering demand for customized shopping, personalized experiences, and data analysis through AI-powered solutions, the global AI in retail market is poised to reach $71.23 billion by 2031, expanding at a CAGR of 32.7% during the forecast period (2024-2031).
Moreover, investors’ interest in tech stocks is evident from the Technology Select Sector SPDR ETF (XLK) 35% returns over the past year.
Given the industry’s robust outlook, investing in quality tech stocks such as UPBD, XRX, and AMSWA could be wise for future gains.
Upbound Group, Inc. (UPBD)
UPBD leases household durable goods to customers on a lease-to-own basis in the US, Puerto Rico, and Mexico. The company operates through four segments: Rent-A-Center; Acima; Mexico; and Franchising. The company's brands, like Rent-A-Center and Acima facilitate consumer transactions across a range of store-based and virtual channels.
On June 5, UPBD declared a regular quarterly dividend of $0.37 per common share, payable to its shareholders on July 9, 2024.
UPBD pays an annual dividend of $1.48, which translates to a yield of 4.76% at the current share price. Its four-year average dividend yield is 4.07%. Additionally, the company’s dividend payouts have increased at a CAGR of 5.1% over the past ten years.
On May 29, UPBD unveiled a new Rent-A-Center store in Espanola, New Mexico. Rent-A-Center Store Manager Casey Montoya and his customer support team offered the residents of Espanola, a flexible lease-to-own option for high-quality furniture, appliances, electronics, computers, and a wide range of other durable goods.
UPBD’s total revenues increased 7.8% year-over-year to $1.10 billion during the first quarter that ended March 31, 2024. Its gross profit grew 4.5% from the year-ago value to $529.07 million. The company’s operating profit came in at $61.76 million for the quarter, against a loss of $35.11 million during the prior year’s quarter.
In addition, the company’s net earnings came in at $27.69 million and $0.50 per share.
Analysts expect UPBD’s revenue for the third quarter (ending September 2024) to increase 5.3% year-over-year to $1.03 billion and its EPS for the same quarter is expected to grow 20.4% year-over-year to $0.95. Moreover, the company topped the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.
Shares of UPBD have surged 7% over the past nine months to close the last trading session at $31.09.
UPBD’s POWR Ratings reflect its solid outlook. The stock has an overall rating of B which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
UPBD has a B grade for Growth and Quality. It is ranked #4 out of 42 stocks in the Specialty Retailers industry.
In addition to the POWR Ratings we’ve stated above, we also have other ratings of UPBD for Sentiment, Value, Momentum, and Stability. Get all UPBD ratings here.
Xerox Holdings Corporation (XRX)
XRX operates as a workplace technology company that integrates hardware, services, and software for enterprises internationally. The company operates through two segments, Print and Other; and FITTLE. It designs, develops, and sells document systems, solutions, and services, and IT and software products and services.
On May 22, XRX’s Board of Directors declared a quarterly dividend of $0.25 per share on its Common Stock. The dividend is payable on July 31, 2024, to shareholders of record on June 28, 2024. They also declared quarterly dividend of $20.00 per share on Xerox Holdings Series A Convertible Perpetual Preferred Stock payable on July 1, 2024, to shareholders of record on June 15, 2024.
XRX pays an annual dividend of $1.00, which translates to a yield of 7.51% at the prevailing share price. Its four-year average dividend yield is 6.01%. Also, the company’s dividend payouts have increased at a CAGR of 4.9% over the past ten years.
On April 2, XRX announced new partnership with Productive Business Solutions Limited to continue the transformation of its operating model specifically in Peru and Ecuador, where the operations will transition to PBS. The transaction is expected to close in the second quarter of 2024.
The partnership with PBS will support XRX’s clients in the region and enable XRX to put greater focus on developing and deploying digital services capabilities to diversify its channel-ready offerings.
During the first quarter that ended March 31, 2024, XRX posted total revenues of $1.50 billion and its adjusted gross profit was $479 million. The company’s adjusted operating income came in at $33 million for the quarter.
In addition, the company’s adjusted net income and EPS came in at $11 million and $0.06, respectively. Its cash and cash equivalents stood at $685 million as of March 31, 2024, compared to $519 million as of December 31, 2023.
Street expects XRX’s EPS for the third quarter (ending September 2024) to increase 31.2% year-over-year to $0.60. For the fiscal year (ending December 2024), the company expects its EPS to grow 22.1% year-over-year to $2.22.
Over the past month, XRX’s stock has plunged 4.6% to close the last trading session at $13.32.
XRX’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Value and Quality. Within the Technology - Services industry, XRX is ranked #23 of 79 stocks.
Click here to access additional ratings of XRX for Sentiment, Growth, Stability, and Momentum.
American Software, Inc. (AMSWA)
AMSWA develops, markets, and supports a range of computer business application software products internationally. The company operates through Supply Chain Management, Information Technology Consulting, and Other segments.
On June 17, AMSWA’s wholly owned subsidiary, Logility, announced its collaboration with Worldly, a sustainability insights and data platform, to support compliant digital supply chains.
On May 30, AMSWA’s Board of Directors declared a quarterly dividend of $0.11 per share. The dividend is payable to the company’s shareholders of record at the close of business on August 16, 2024, to be paid on or about August 30, 2024.
AMSWA pays an annual dividend of $0.44, which translates to a yield of 5.05% at the current share price. Its four-year average dividend yield is 2.93%. Moreover, the company’s dividend payouts have increased at a CAGR of 3.9% over the past ten years.
On May 6, AMSWA’s wholly owned subsidiary, Logility, a leader in prescriptive supply chain planning solutions expanded its generative AI capabilities across the Logility® Digital Supply Chain Platform, to empower organizations with the tools they need to unlock their data and make their supply chains more efficient, resilient, and competitive.
For the fourth quarter that ended April 30, 2024, AMSWA reported total revenues of $25.39 million and its operating earnings from continuing operations came in at $672 thousand. The company’s net earnings and EPS for the quarter were $2.17 million and $0.07, respectively.
Analysts expect AMSWA’s EPS for the second quarter (ending October 2024) to increase 4.2% year-over-year to $0.08 and its revenue for the same period is expected to grow marginally year-over-year to $25.75 million. Also, the company has surpassed the consensus EPS estimates in three of the trailing four quarters.
AMSWA’s stock has declined 15.1% over the past year to close the last trading session at $8.72.
AMSWA’s POWR Ratings reflect its bright prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
AMSWA has a B grade for Value, Sentiment, and Quality. The stock is ranked #20 among 134 stocks in the Software - Application industry.
To access AMSWA’s other ratings for Growth, Momentum and Stability, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
UPBD shares were trading at $31.69 per share on Monday afternoon, up $0.60 (+1.93%). Year-to-date, UPBD has declined -4.61%, versus a 15.22% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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