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3 dividend stocks priced to buy

Profitable investing, like everything we do, requires us to make decisions that maximise our chance for success and minimise downside. We’re not going to get it right every time, but minimising the obvious impediments to our success make the decisions just a little bit easier. Here are three stocks that have been beaten down, either recently or over time, but have good management, strong balance sheets and could represent solid buying opportunities for the savvy investor.

Every investor knows Telstra (ASX: TLS), but its stellar run-up in price since the beginning of 2011 has investors concerned about its ability to remain at such high levels. Of serious concern is the company’s medium to long term revenue growth due to the increased competition by rival ISPs on the NBN, the decommissioning of its lucrative copper network and the slowing mobile growth.

To counter those concerns, the company has and will continue to be the dominant Internet Service Provider, and has two booming businesses, National Application Services and international divisions, and in addition is getting paid to decommission its copper network. Add together its brand recognition, strong sales, one of the best dividends on the ASX and good leadership and you’ve got yourself a strong buying opportunity.

One company in the software and technology space that has been exciting in recent months is Oakton (ASX: OKN) – since mid-August the company has rallied 35%. Oakton is responsible for such applications as the new ING banking application for mobile devices. Despite a reduced revenue and NPAT for FY13, the company continued to buy back shares (around 4.4% of total shares available on the market), pay out a dividend of 9.5 cents (93% pay-out ratio), has no debt and investors could expect the company to grow revenue in the coming year.

Another exciting IT company is Data#3 (ASX: DTL). Data#3 provides cloud services and market-leading business technology solutions throughout Australia. The company has a bright future ahead, has a ROE of 35% and pays a 7 cent full year dividend, giving it a yield of 6.1% fully franked.

Foolish takeaway

Technology is an exciting sector to invest in. Australians have one of the highest adoption rates to smartphones that can, and will increasingly use, a range of software services such as the cloud and networking. These stocks could pose great long-term buying opportunities for investors willing to be rewarded with dividends while they wait for Mr Market to do his work.

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Motley Fool contributor Owen Raszkiewicz owns shares in Data#3 and Oakton.

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