Investor sentiment has remained high for tech stocks amid the implantation of the Fed’s deflationary cycle. Lower interest rates should favorably impact the operating environment for many companies, especially technology-focused enterprises.

That said, the cushion of a dividend may still be reassuring considering the Nasdaq has soared over +60% in the last two years. After such an impressive rally among the tech-heavy index, investors may also be searching for more reassurance in terms of valuation.

While it may be tougher to find reasonably valued tech stocks that offer generous dividends here are two to consider.

CSG Systems International

Operating as a software-as-a-service (SaaS) platform company, CSG Systems International’s CSGS stock may be in store for an extended rebound. Notably, CSG Systems belongs to the top-rated Zacks Computer-Services Industry which is currently in the top 4% of over 250 Zacks industries.

CSG Systems looks poised to benefit as a leading provider of software solutions for outsourced billing and revenue management. To that point, CSGS is still -18% from its 52-week high of $55 a share and trades at just 11.1X forward earnings.

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Trading at a sharp discount to its industry average of 20..3X forward earnings and the benchmark S&P 500’s 23.9X, CSG Systems annual EPS is expected to spike 15% in fiscal 2024 to $4.26 versus $3.69 a share last year. Plus, FY25 EPS is projected to rise another 6%.

More intriguing is that FY24 and FY25 EPS estimates have remained noticeably higher over the last 60 days and CSGS offers a 2.54% annual dividend yield. This tops the benchmark’s 1.24% annual dividend average with many of its computer services peers not offering a payout.

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Canon 

Being a leader in professional and consumer imaging equipment and information systems, Canon’s CAJPY stock is enticing in terms of valuation with a favorable outlook as well.

Furthermore, Canon’s Zacks Office Automation and Equipment Industry is also in the top 4% of all Zacks industries with a few notable peers being Pitney Bowes PBI and Seiko Epson Corporation SEKEY. Soaring nearly +30% this year, Canon’s stock still trades at a reasonable 14.9X forward earnings multiple compared to the industry average of 19.4X.

Canon’s EPS is expected to expand 18% this year and is forecasted to increase another 2% in FY25 to $2.24. Suggesting that CAJPY may have more short-term upside is that FY24 and FY25 EPS estimates have risen roughly 5% in the last two months respectively. Even better, with Canon’s stock at around $33, its 2.53% annual dividend offers further reassurance.

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Bottom Line

At the moment, CSG Systems and Canon's stock both boast a Zacks Rank #1 (Strong Buy). They have the rare combination of not only earnings growth and value but very generous dividends which can be hard to spot among the tech sector. Seeing as earnings estimate revisions are higher now may be an ideal time to buy.

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CSG Systems International, Inc. (CSGS) : Free Stock Analysis Report

Canon, Inc. (CAJPY) : Free Stock Analysis Report

Pitney Bowes Inc. (PBI) : Free Stock Analysis Report

Seiko Epson Corp. (SEKEY) : Free Stock Analysis Report

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