
What happened
Zacks Investment Research spotlights Broadcom (AVGO), Vertiv (VRT), and Caterpillar (CAT) as AI-related stocks that pay dividends. Yields are 0.7%, 0.1%, and 0.8% respectively.
Why it matters
Income-focused investors often overlook AI stocks, which typically use spare cash for growth. These three offer payouts, with Broadcom's dividend growing 13.3% annualized over five years.
What to watch
Caterpillar deployed $7.9 billion in cash for share repurchases and dividends in FY25 and holds Dividend Aristocrat status. Whether its data-center power demand continues is key.
WHO IT HITSIncome-focused investors and dividend-seeking portfolios gain a shortlist of AI-exposed names, while growth-oriented AI investors may reassess these stocks for yield.
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The article points out that dividend-seeking investors typically bypass AI-related companies because those firms tend to reinvest spare cash into growth rather than payouts. But it names three exceptions: Broadcom, Vertiv, and Caterpillar. Each has a distinct link to AI infrastructure. Vertiv supplies power, cooling, and IT infrastructure for data centers and communication networks. Broadcom has built a broad technology portfolio for next-generation AI infrastructure. Caterpillar provides raw power for data centers, with demand rising for large reciprocating engines used in data-center applications.
The financial profiles differ. Vertiv's yield is modest at 0.1%, but the article frames it as a growth-and-yield combination. Broadcom yields 0.7% and has a five-year annualized dividend growth rate of 13.3%, supported by strong cash generation. Caterpillar yields 0.8%, deployed $7.9 billion in cash for repurchases and dividends in FY25, and holds Dividend Aristocrat status. That mix of AI exposure and shareholder returns is the article's central pitch.
For income-focused investors, the appeal may hinge on whether these companies can sustain payouts while funding AI-related growth. The article does not forecast future dividends or AI demand, so the durability of these yields remains to be seen. What it does suggest is that AI exposure and dividend income are not mutually exclusive, which may prompt some investors to look closer at these names.
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