2 Tech Stocks That Pay You to Own Them

We can confidently say that most investors putting money into tech stocks aren't doing so for the dividends they pay. A great many names in the sector hand out exactly $0 to their stockholders, choosing instead to plow their free cash flow (FCF) into activities like research and development, and marketing. It's awfully competitive out there, and if a company isn't careful, it can quickly lose its edge in the market.

There are exceptions, however, and some tech companies even dispense their payouts at relatively generous rates above the current 1.2% average offered today by the S&P 500 index. Here's a look at two such outliers: Verizon Communications (NYSE: VZ) and Nokia (NYSE: NOK).

1. Verizon

In terms of revenue, Verizon is the largest of the three incumbent U.S. telecom companies. That isn't quite the advantage you might think, as the essentially three-way race is tight and competitive. According to recent research from Dow Jones & Company cited by Morningstar, Verizon holds a 34% share of the U.S. market, inches behind T-Mobile US's 35%, and ahead of AT&T's 27%.

Image source: Verizon Communications.

Before long, however, it might vault ahead to recapture the No. 1 spot it held for numerous quarters. Verizon's excellent fourth-quarter results, published at the end of January, revealed that its net postpaid (i.e., contract) phone additions totaled 616,000. That was significantly more than the 504,000 it reported for the same quarter the previous year, and the highest number in any quarter this decade.

Verizon isn't only a mobile telephony business, of course. Happily for its investors, it's also doing well in its other businesses. Net "adds" for its broadband internet offerings were also robust in the fourth quarter of 2025, at 372,000, while its Fios fiber internet service was similarly well in positive territory, with 67,000 additions.

These operational victories helped Verizon post a bit of top-line growth on an already considerable revenue line. The company's total take for the quarter was 2% higher year over year at nearly $36.4 billion, while earnings per share not in accordance with generally accepted accounting principles slipped by a penny to $1.09. Both results topped the consensus analyst estimates.

For income investors, one metric that really matters is FCF, as cash-generating businesses are best positioned to fund and ideally regularly increase a dividend.

With its solid base of postpaid users providing a thick, steady, and generally predictable flow of revenue, Verizon sure checks that box. It crept up to $20.1 billion at the end of last year, up from the year-ago figure of $19.8 billion. That was more than enough to take care of the $11.5 billion in dividend payouts that year.

With that kind of financial muscle, Verizon has lifted its quarterly dividend for 19 years in a row, and it feels to me that streak can run for at least a few more years. Its current $0.69-per-share disbursement counts as a high-yield dividend, at 5.5%.

2. Nokia

Some younger folk might not remember, but at the dawn of mass cell phone adoption -- those long-ago days of the 1990s and early 2000s -- Finland-based Nokia was the king of hardware. Its handsets were the phones of choice for many consumers, particularly in its native Europe.

In the new century, however, the company proved it couldn't compete in the smartphone revolution spearheaded by the likes of iPhone maker Apple and devices powered by Alphabet's Android operating system. So Nokia adapted, choosing to concentrate on the unglamorous network infrastructure segment instead. It also wisely chose to retain a clutch of patents crucial to network operations, providing it with a valuable source of passive revenue.

Image source: Getty Images.

While mobile networks remain Nokia's specialty, over the past few years it has used its know-how to assertively push into the data center segment. The irresistible rise of artificial intelligence technology has created a hot market for data center buildouts, and the company's specialized equipment has found its way into such facilities.

Nokia has placed its future hopes on 6G mobile technology. Unlike the current 5G standard, this won't be a notable technological leap; instead, it's more of a refinement. Again, though, the mobile telephony sector is highly competitive, so the incumbent carriers will be more than eager to upgrade, since any edge in big telecom is useful.

So at the moment, there's a bit of a treading-water quality to Nokia. Each of its two main business activities posted 2% year-over-year net sales gains in the company's latest-reported quarter. It spent more on research and development and on selling, general, and administrative expenses to remain competitive, but doing so contributed to a steep 33% decline in headline net income during the period. FCF also declined, by 28%.

Like Verizon, Nokia had plenty of FCF to cover its quarterly dividend, which equates to a U.S. dollar payout of just over $0.04 per share, yielding 2.4%. Personally, however, I'm not convinced 6G will be the great boon for Nokia that management is clearly striving for, and the dividend isn't generous enough to make the stock compelling on that basis. Investors who are more bullish on this technology might find the company's shares appealing, though.

Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Alphabet and Apple and is short shares of Apple. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.