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3 ASX tech shares that pay dividends

getting growth and income from asx shares represented by dog holding cash in one hand and a piggy bank in the other
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When it comes to ASX dividend shares, the mind usually doesn’t jump to the tech space. Tech shares have long been associated with high-growth, high-octane investors. If you ask a typical ASX investor to name ten top dividend shares, I would wager that there wouldn’t be one tech share on the list.

Tech shares and dividends have long had an interesting relationship in the investing world. Over in the United States, dividend-paying companies even have a certain stigma attached to them. Probably due to a lack of a ‘franking’ system, US companies are considered ‘mature’ or ‘tired’ if they start paying a dividend. Even today, US tech titans like Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Netflix Inc (NASDAQ: NFLX) and Facebook Inc (NASDAQ: FB) still don’t pay dividends, despite their mountains of free cash flow and (in some cases) trillion-dollar market capitalisations.

One tech titan that does pay a dividend is Apple Inc (NASDAQ: AAPL). But when it announced a new dividend program in 2012, some investors were dismayed that Apple was ‘no longer cool’. What a funny old world!

But that’s the US, and we’re here to talk about ASX tech shares. Many ASX tech shares, such as Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Xero Limited (ASX: XRO) do not currently pay dividends. But others do.

3 ASX tech shares offering dividends

One such example is Appen Ltd (ASX: APX). Appen works with tech companies to help computer and artificial intelligence programs communicate better with humans. Appen has paid two dividends in 2020 – a 5 cents per share payout in February and a 4.5 cents per share dividend last month. 9.5 cents per share in total dividends for 2020 gives Appen a trailing dividend yield of 0.26% on current prices. That’s not too exciting, but it’s better than nothing!

Altium Limited (ASX: ALU) is another tech high-flyer that pays out a dividend. Its last two payouts came in at 19 and 20 cents per share respectively, which gives Altium a trailing yield of 1.06% on current prices. Again, that’s not enormously impressive, but it’s better than Appen. What’s more, Altium has been rapidly increasing its dividend every year for a while now (including in 2020, the year of the pandemic). In 2016, Altium gave shareholders 20 cents per share in dividends. In 2020, the company had ramped this payout up to 39 cents per share. This could be a fantastic dividend growth stock if this pattern continues. 

A final option to consider is Computershare Limited (ASX: CPU). Computershare isn’t normally lumped in with the ‘exciting’ tech stocks like Altium and Appen, probably because it’s been around for a couple of decades now. But it’s still one of the best tech shares to buy for dividend income. Computershare’s last two dividends both came in at 23 cents per share. That gives Computershare a trailing dividend yield of 3.46%, which also comes partially franked.

Foolish takeaway

Although ASX tech shares are still not a sector with market-beating dividend yields on offer, there is still income potential if you know where to look. As tech companies become more and more dominant on the ASX, I expect this trend to continue growing as well. So watch this space, income investors!

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Returns as of 6th October 2020

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Facebook. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Altium, Amazon, Apple, Facebook, and Netflix. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero and ZIPCOLTD FPO and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Facebook, and Netflix. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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