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By Adam Osman, Motley Fool Canada
When it comes to Canadian tech stocks, growth potential is the main reason most investors are interested in them, and while these stocks often offer market-beating returns, their volatile nature can also mean they come with a slightly higher risk profile.
But there are some tech stocks that offer investors more stable income through dividends, and three of them stand out among this relatively small group.
IT Solution Provider
Converge Technology Solutions (TSX:CTS) is a Toronto-based IT solutions provider and one of the newer entrants in the space: the company was founded in 2016 and joined the TSX in 2018. Initially, the company's share price saw exceptional growth, increasing by well over 1,100% between May 2018 and September 2021.
However, since then, it has been in a severe correction mode and has remained mostly down except for a few bullish periods.
The upside to this downturn is that the company's dividend yield is currently 1.2%. The company only recently started paying a dividend (in 2023) and has already increased it by 50%. Even if we don't see this kind of dividend growth going forward, it's still a reasonable choice for a dividend stock from the technology sector.
Software service company
If you're looking for a relatively long-established company in the technology space, Enghouse Systems (TSX:ENGH) might be a good fit. The company was founded in Markham in 1984 and has gone through multiple stages of growth and evolution. Today, it provides software services to a variety of vertical markets through two business groups: Interactive Management and Asset Management.
The company has a relatively long history of paying dividends, having increased its payout for enough consecutive years to earn the noble title. The pace at which the dividend has grown has also been impressive, more than doubling over the past five years. It currently yields an attractive 3.5%.
AI companies
OpenText (TSX:OTEX) is not a pure AI company, but it is one of the best known names in artificial intelligence (AI) in the Canadian tech sector. The company is essentially an information management systems company, and has access to vast amounts of corporate data, making it a perfect fit for AI tools, as AI thrives on data.
The story continues
The stock hasn't jumped on the AI ​​bandwagon yet and is currently trading heavily discounted, losing more than a third of its value so far in 2024 alone.
But one upside to this downturn is that the company's dividend currently yields 3.5%, which is pretty high for a tech stock, and it has a history of growing its dividend, raising it from $0.17 per share in 2020 to $0.25 per share in 2024.
Stupid takeaway
The technology sector has been in a bear market for at least the past four months and shows no signs of recovery yet. However, this downturn presents a great opportunity for investors to pick dividend-paying companies from this industry and lock in high yields.
The article 3 Dividend-Paying Tech Stocks to Buy Now appeared first on The Motley Fool Canada
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Fool contributor Adam Osman has no position in any of the stocks mentioned. The Motley Fool owns shares in and recommends Enhouse Systems. The Motley Fool has a disclosure policy.
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