Four Dividend-paying Technology Investments to Buy Feature Futurist George Gilder’s Pick

Four dividend-paying technology investments to buy feature futurist George Gilder’s tempting turnaround recommendation in one of his top trading services.

The four dividend-paying technology investments to buy not only include Gilder’s recommendation that offers a 3%-plus yield but also two exchange-traded funds and an income-paying stock highlighted at the 30th Annual Baron Investment Conference Capital Investment Conference in New York City.  The first of the four dividend-paying technology investments to buy is from a technology trading service called Gilder’s Moonshots.

The Gilder’s Moonshots trading service has six different portfolios that each reflect a different level of risk  That risk affects the percentage of an investor’s funds that should be put into a given stock that is recommended in Gilder’s Moonshots. The categories of the Gilder’s Moonshots recommendations are Liftoff, Escape Velocity, Orbit, Course Correction, Deep Space and Test Flight.

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Four Dividend-paying Technology Investments to Buy: AudioCodes

Israel’s AudioCodes Ltd. (NASDAQ: AUDC) enables enables enterprises to manage voice, video, and data communications via a cloud-based service. Unified Communications as a Service (UCaaS), also known as UC, provides session border controllers, media gateways and other infrastructure to ensure smooth and secure communication. In third quarter 2023 ended Sept. 30, AudioCodes’ revenues rose 2.6% sequentially to $61.6 million and climbed 4% from first quarter 2023.

This is all in the wake of a nearly $12 million macro-driven collapse from an all-time high of almost $71 million for 4Q 2022. Perhaps more importantly than this welcome, if modest, climb back, the company is smartly pivoting towards emergent, revenue-rich sectors, including cognitive services—particularly speech to text—generative artificial intelligence (AI), and Large Language Models (LLMs).

By integrating these technologies with its deep expertise in telephonic solutions and services, the company is positioning itself as a contender in the voice AI market. AudioCodes’ customers love it: conversational AI bookings rose more than 50% for Q3, with more double-digit growth in the pipeline.

Chart Courtesy of www.stockcharts.com

Four Dividend-paying Technology Investments to Buy: Gilder’s Choice

While the overall revenue numbers were positive, especially eye-catching was the 13.8% growth in services revenue (more than 5X the previous quarter’s increase), now accounting for nearly half its total revenue.

This growth is driven essentially by the company’s Live subscription business, with annual recurring revenues increasing to $43 million, up from $40 million in Q2 (with projections to continue to ramp by 50% for the full year). We like subscription-based models, which make revenues predictable and, for AudioCodes, is boosting margins in the bargain, according to Gilder, co-founder and senior fellow at the Discovery Institute and head of the Gilder’s Moonshots.

Non-GAAP gross margin increased from 64.5% to 67.3%, attributable to increased services revenue (yea!) and an improved product mix. Non-GAAP operating margin swelled to 15.5% from 9.5%, and non-GAAP earnings per share (EPS) climbed to $0.25 from $0.16.

AUDC’s forward P/E of 9.5 falls far short of the Russell 2000 market comp forward P/E of 22.4. The company is not only delivering in the short term but poised for multi-year growth. Plus, it offers a nice dividend yield of 3.72%.

Paul Dykewicz meets with George Gilder, head of Gilder’s Moonshots.

Four Dividend-paying Technology Investments to Buy: XLK

The second of four dividend-paying technology investment to buy use artificial intelligence is Technology Select Sector SPDR Fund (NYSE: XLK), featured in the Forecasts & Strategies investment newsletter led by Mark Skousen, PhD. That fund had jumped 33.04% in 2023 through June 8, but it has dipped a bit since then. The fund still is up 32.65% on a total return basis through Oct. 30.

Investors who can stomach volatility may want to tap these technology equities in pursuit of potent performance.

“Bear in mind that governments may start to regulate artificial intelligence and affect the independence of companies to do what their management teams want,” I wrote in my June 20 dividend column.

Technology entrepreneur Elon Musk, the owner and CEO of Twitter, Inc. (NYSE: TWTR), CEO of Tesla Inc. (NASDAQ: TSLA) and founder and CEO of privately held SpaceX, said on a recent podcast with presidential candidate Robert F. Kennedy Jr. that China is planning to initiate the regulation of artificial intelligence.

Skousen, a strong advocate of XLK, serves as a Presidential Fellow at Chapman University, as well as the head the Forecasts & Strategies investment newsletter. Skousen, who is a descendant of founding father, diplomat and inventor Benjamin Franklin, also is a seasoned stock market forecaster.

Mark Skousen, head of Forecasts & Strategies and scion of Ben Franklin, talks to Paul Dykewicz.

In a presentation Skousen gave on Sunday, Oct. 29, at the MoneyShow in Orlando, Skousen spoke about “The Fed Disaster Plan.” Skousen told attendees how the Federal Reserve has aggressively raised interest rates and created an inverted yield curve. The U.S. central bank leaders have raised rates faster than any other time in the past 30 years, taking its toll on Wall Street, Skousen added.

“When you can get a 5.4% return on safe money market funds or government securities, it’s hard to stay invested in risky growth stocks,” Skousen opined.

So far, the economy has avoided recession; the federal government announced recently that real GDP in the third quarter rose 4.9%, due to strong consumer and government spending. But business is slumping, leaving the door open for an all-out recession in 2024, which also will be an election year, Skousen counseled.

Four Dividend-paying Technology Investments to Buy: KDIV

A broad technology fund that also offers a dividend yield and some exposure to artificial intelligence is First Trust NASDAQ Technology Dividend Index (TDIV). The ETF seeks to track the Nasdaq Technology Dividend Index, which is composed of technology and telecommunications companies, said Bob Carlson, a pension fund chairman who heads the Retirement Watch investment newsletter.

Bob Carlson, head of Retirement Watch, gives an interview to Paul Dykewicz.

TDIV recently had 84 holdings, and its 10 largest positions accounted for 53.7% of its assets. The biggest weightings recently were Microsoft (NASDAQ:MSFT), IBM (NYSE: IBM) and Broadcom (NASDAQ: AGVO).

Chart Courtesy of www.stockcharts.com

Four Dividend-paying Technology Investments to Buy: Kinsale Capital Group

Michael P. Kehoe, founder and chief executive officer of the Richmond, Virginia-based Kinsale Capital Group Inc. (NYSE: KNSL), represented his company at the 30th Annual Baron Investment Conference in New York City on Friday, Nov. 10. Kehoe spoke about how his company has grown since starting operations in March 2010 as an underwriter of specialty commercial insurance in 50 states and the District of Columbia. The company has an A (Excellent) rating from the AM BEST Company.

Despite its role in the insurance industry, the company has used technology and recently artificial intelligence to differentiate itself from competitors. The result is strong profit margins and growth, Kehoe told attendees.

Kinsale Capital Group Inc. was one of four companies whose CEOs spoke to thousands of attendees at the event held at Lincoln Center. The company also offers a modest 0.16% dividend yield that could grow in the future along with the business.

Chart Courtesy of www.stockcharts.com

Political Risk Mounts with Wars in the Ukraine and the Middle East

Investors need to withstand headwinds of higher-for-longer interest rates, runaway federal deficits and rising political risk with Russia’s unrelenting war in Ukraine amid escalating attacks in the Middle East following the murderous Oct. 7 rampage by Hamas inside Israel.

President Joe Biden invoked the Defense Production Act on Oct. 30 in a technology-related executive order. Such executive orders only are meant to be issued in the most urgent of times, such as mobilizing the nation during war or developing COVID vaccines amid a pandemic. His executive order about artificial intelligence (AI) applied the same authority to make companies prove that their most powerful systems are safe before allowing their use.

That means companies must inform the government about the large-scale AI systems they’re developing and share rigorous independent test results to prove they pose no national security or safety risk to the American people, President Biden said. At the same time, President Biden said he would direct the Department of Energy to ensure AI systems don’t pose chemical, biological, or nuclear risks.

In the wrong hands, AI can make it easier for hackers to “exploit vulnerabilities” in the software that makes American society run, President Biden said.

For that reason, President Biden said he was directing the Department of Defense and the Department of Homeland Security to develop “game-changing cyber protections” that will make computers and critical infrastructure more secure than today. As part of that response, President Biden said his administration would take “decisive steps” to prevent the use of cutting-edge AI chips that could undermine U.S. national security, he added.

Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is a great holiday gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.