Growth Emerging Among Large-Cap Tech Stocks?

Large-Cap Tech Stocks Seeing Emerging GrowthWhile earnings growth has been modest (and greatly reduced in the energy sector, skewing the market), there have been lots of decent results, which bodes well for the rest of the year.

Cisco: Large-Cap Tech Stock Awakened by Sales Growth

Some brand-name stocks have been awakened from their slumber. One of these stocks was Cisco Systems, Inc. (CSCO), which reported a genuinely good quarter, its second fiscal quarter of 2015 (ended January 24, 2015).

Not only did the company report solid financials, but it also boosted its quarterly dividend 11% to $0.21 per share. Cisco also bought back 44 million of its own shares, which is a common strategy among dividend-paying large-caps.

The company’s second-quarter sales grew seven percent comparatively to $11.9 billion. Net earnings grew 68% to $2.7 billion, while net earnings per share grew 70% to $0.46.

Cisco’s share price has been treading water ever since the financial crisis began and only recently has the stock generated some renewed enthusiasm among institutional investors.

Oracle: Large-Cap Tech Play Seeing Material Sales, Earnings Growth

Another large-cap tech issue that has recently done the same is Oracle Corporation (ORCL), which has struggled to provide the Street with material sales and earnings growth.

The company’s shares spiked after its recent financials, which were a surprise (that is, for a slow-growth, mature enterprise). Like many others, currency translation knocked everything back materially. (As we know, currency translation is currently a big issue, affecting sales and earnings for many companies.) While investors jumped on the stock after noting a solid comparable gain in software and cloud sales, the position has since leveled off.

I’ve always liked Oracle for risk-averse investors. What would be great to see from this company is an increase in dividends. I think institutional investors would rally around this stock substantially if the company’s dividend yield was materially over two percent (1.1% currently).

Intel: Old-School Tech Company Gaining Wall Street’s Attention

The other technology large-cap that came out of its slumber last year was Intel Corporation (INTC). This stock has more legs and the company is executing well (for such a mature business, at least).

The company surprised the Street with an increase in sales, even though the personal computer (PC) market is slow.

Wall Street’s earnings estimates have been going up for the company across the board. Earnings are especially forecast to rise in 2016.

Intel is not expensively priced and yielding just under three percent. On a material market sell-off, this company would be a good example of the kind of stocks new investors could look at as a decent buy for income. At this time, there is not a lot of value in this market.

But in equities, the illusion becomes real and the perception of growth is what the marketplace will buy.

On a material price correction, there would be a number of names worthy of consideration for new money. Many old-school, large-cap technology stocks are emerging from their slumber. It will be interesting to see if the trend has staying power.