These 2 tech giants have declared dividend increases

We're in the midst of the first earnings season of 2025, and as always, many companies have announced dividend increases along with their quarterly earnings results. Although the tech sector has traditionally focused on growth rather than dividends, some companies with high cash reserves are still offering attractive payouts.

Let's take a look at two notable dividend increase announcements that came this month - from Meta Platforms and Cisco Systems.

Meta Platforms $META

Mid-month, Meta raised its quarterly dividend by 5% to just under $0.53 per share. This is a historic moment, as it's the first time the social media giant has raised its dividend payout (though admittedly, it only started paying a dividend in early 2024).

Meta still dominates the social media world and no other company even comes close. Advertisers continue to flock to its platforms to place ads precisely targeted to potential customers.

The company released its fourth quarter results at the end of January and - as expected - once again showed strong growth. Revenue was up 21% year-over-year to more than $48 billion, and net income increased 49% to nearly $21 billion. Both figures significantly exceeded analysts' estimates.

The only negative aspect of the earnings report was the expected decline in revenue in the first quarter of 2025. Management is forecasting revenue in the range of $39.5 billion to $41.8 billion, with the midpoint of that forecast ($40.65 billion) slightly below the average analyst estimate of $41.64 billion. However, would it really be worth selling the stock because of a 2% deviation from expectations?

Analysts often underestimate Meta's ability to generate earnings, and they still seem to be unchanged in this regard. According to Yahoo Finance, annual revenue growth is expected to be less than 15% and earnings per share growth is expected to be 5% compared to 2024. However, given the results to date, it is likely that Meta will once again beat forecasts.

The increased dividend will be paid on March 26 to shareholders of record as of March 14. At the current share price, the dividend yield is 0.3%.

Cisco Systems $CSCO

Compared to Meta, Cisco stock offers a significantly higher dividend yield. On the other hand, the company is already an established player in the market, which means it occasionally faces declines in key financial metrics.

One aspect that has been steadily improving for Cisco, however, is the dividend. The company has increased it every year since 2011, when it first paid it. Although these increases are usually gradual, they add up over the long term. The quarterly dividend payout has increased nearly sevenfold - from $0.06 to the current $0.41 per share.

Cisco may not be a Meta, but the company is also well positioned for further growth, thanks to the growing demand for artificial intelligence (AI). In its second-quarter fiscal 2025 results, CEO Chuck Robbins said: "As AI becomes more prevalent, we are well positioned to help our customers expand their network infrastructure, increase data capacity and adopt cutting-edge AI-based security solutions."

But for now, it's more of a promise than a reality. In the second quarter, revenue grew 9% year-over-year to $14 billion, but much of that growth came from Cisco's acquisition of Splunk, an innovative data analytics player. The acquisition was completed early the following year, and Splunk is now part of Cisco's results. Without it, however, the company's traditional segments would have seen a 1% decline in revenue.

Nevertheless, Cisco is a stable player with high margins - its net profit is typically around 20% and free cash flow remains strongly positive. This is a company that can generate solid profits and has enough capital to reward its shareholders. In the technology sector, where dividend stocks are rare, this is a rare exception.

The increased dividend will be paid on April 23 for shareholders with a holding date of April 3. At the current share price, the dividend yield is 2.5%.

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