[Editor’s note: This article is regularly updated to include the most relevant information available.]
Technology is one of the crucial drivers of the economy. Problem-solving innovations and new ideas that make commerce more profitable all help grow economic development and success.
And for investors, technology brings opportunities to cash in on the power of changes in companies, industries and whole economies. Back in the late 1990’s I was with Investec, which is a major global investment bank and asset management company. And the internet was a flurry with a near gold rush mentality bringing dot-com companies to the market, some with substance and others lacking.
We wanted to show the power of change and partnered with Kevin Kelly, who was then executive editor of Wired magazine. Kevin wrote the 1998 book New Rules for the New Economy. He detailed various strategies for varied industries to capitalize on the power of change in technology. Wired created the Wired Index, and we launched a fund to track that index.
Tech isn’t just about Silicon Valley — it’s all about new ideas and new processes. And I continue to embrace this as I research and present varied companies and their stocks. So, please read on for some of my stocks which are generating new ideas and cashing in on them for shareholders this year.
Dividend Stocks to Buy: Covanta Holdings (CVA)
Dividend Yield: 6.5%
Trash continues to pile up around the United States and well beyond. And adding to the trash isn’t just the piles of used Amazon (NASDAQ:AMZN) boxes, but the dramatic drop in the viability of recycling. With China and other nations cutting off the exports of trash and recycling, sorting has become too expensive. This has resulted in hundreds of localities eliminating recycling and even more restricting or moving to end the process.
There are two ways to deal with this. First is to pile more trash into landfills — but for anyone that has seen the Disney (NYSE:DIS) film Wall-e, this won’t end well. The second way is what is being done by Covanta Holdings (NYSE:CVA). Covanta is the leader in clean energy from waste and dominates this market.
The company has been contracted by a growing number of municipalities to accept trash and turn it into energy. In turn, Covanta sells that energy back to local power authorities. In doing so, it eliminates the trash, collects and processes remaining minerals for sale, and gets paid along the way.
Revenues are climbing, with gains over the past year of 6.6% as more communities sign on. And it pays a nice dividend yielding 6.5%.
FMC Corporation (FMC)
Dividend Yield: 1.8%
With the globe’s population continuing to soar, so too does the need for more food production. And with limitations on land for agricultural production, it’s all about getting more and better crops from less land and less water.
This is where FMC Corporation (NYSE:FMC) is bringing its technologies to make more food more efficiently. As the company that designed one of the first mechanical pesticide and herbicide machines, it knows how to make tech work to solve for better crops.
It also works with boots on the ground as it has a global network of local representatives to tailor chemicals and applications for all sorts of needs. As a result, it is well-received by markets around the globe — including tough markets such as India and China.
The company has revenues soaring with the trailing year seeing gains of 69.3%. And it pays a dividend to shareholders after re-investing some of its earnings for more development. The yield is running at 1.8%.
Hercules Capital (HTGC)
Dividend Yield: 8.9%
In order to develop a new idea and bring it to market, you need capital. Even the best ideas in the world won’t mean a thing without the wherewithal to make them realities. Countless bright folks around Silicon Valley — and well beyond — are introducing new ideas. And Hercules Capital (NYSE:HTGC) makes them happen.
Hercules provides financing for new ideas from companies at all stages of developments. It also takes equity participation so when the ideas are ready for the financial markets, it takes a cut. And along the way, it earns ample interest from its financing while also providing guidance to its customers.
It has revenues advancing by 8.8% over the trailing year. And it pays an ample dividend yielding 8.9%. In addition, Hercules is my stock pick for InvestorPlace.com’s Best Stocks for 2020 contest.
Dividend Yield: 1.2%
One of the biggest threats to successful tech companies is keeping revenues coming in year-in and year-out. It used to be that companies would bring out a product and wait for sales. If the product was good, sales would come in. But after the run of sales, the only way to get more was to come up with another product. This is a challenge that often leads to uneven business revenues.
Microsoft (NASDAQ:MSFT) was the king of this model. It would make an operating system or a software package and put the disks into boxes to be bought. Then it would have to wait for the next product for customers to buy another round of boxed software.
But the company changed. It moved to focusing not on unit sales, but recurring revenues from its software subscriptions. And it also focused its subscription model to become the second-largest provider of cloud computing services.
Revenues are now not just climbing with the trailing year seeing gains of 14% — but they are continuing to roll through month after month, providing reliable cash for further business development. Plus the dividend now yields 1.2%.
NextEra Energy (NEE)
Dividend Yield: 2%
Utilities are probably not what comes to mind when you’re thinking about tech and new, new things. But the markets and the world are changing, and one utility is leading the way with innovations that allow for more power.
NextEra Energy (NYSE:NEE) is a traditional power utility providing regulated power to markets in Florida. But it got onboard with the other side of utilities with unregulated power generation around the U.S. and well beyond. But it did not do so with natural gas, petroleum or coal –- but with wind and solar.
Wind and solar come with benefits including tax subsidies which NextEra Energy is a master of making the most of for more profits. And it also has the benefits of mandated green power by state and local authorities — making for even more opportunities for the company.
The result is that the company is one of the largest power providers for wind and solar.
Revenues are ample and feed a great return on shareholder’s equity of 9.1% and a return on its massive capital running at 7.1%. And it pays a dividend along the way with a current yield of 2%.
Dividend Yield: 0.6%
While many might enjoy a vegetarian or vegan diet, the globe continues to be hungrier for more pigs, cows and chickens. But just like for people, animals and livestock are susceptible to a wide variety of ailments including viruses. But also like for people, some companies utilize technology to bring better health and vaccines for livestock. And the leader in this tech space is Zoetis (NYSE:ZTS).
One of the proofs of its successes is its development of vaccines for swine flu including the African swine fever which is decimating the world’s pig population.
And its not just about animals which many love to consume, but the millions of pets around the globe that Zoetis helps to be more healthy along the way, including my dachshund, Blue.
Revenues are climbing with the trailing year seeing gains of 9.8%. And while it does retain a lot of its earnings for more product development it does pay a dividend yielding 0.6%.
Neil George was once an all-star bond trader, but now he works morning and night to steer readers away from traps — and into safe, top-performing income investments. Neil’s new income program is a cash-generating machine … one that can help you collect $208 every day the market’s open. Neil does not have any holdings in the securities mentioned above.