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Despite the fragile recovery, dividend payments are expected to approach $26-billion (U.S.) this yearJoshua Lott/Reuters

Fresh on the heels of Dell Inc.'s decision to start paying dividends, Moody's Investors Service says payouts from the entire tech sector are on course to rise this year more than usual.

Despite the fragile recovery, dividend payments are expected to approach $26-billion (U.S.) this year, up 14.3 per cent from 2011. Over the last four years, tech dividends have grown at an annual average of 10.9 per cent, Moody's says.

The ratings agency adds that the increase in payments won't affect credit ratings because the tech sector's dividend payments relative to discretionary cash flow average just 21 per cent, compared with between 40 per cent and 50 per cent for many non-technology sectors.

"We believe most dividend-paying technology companies will keep payouts below 30 per cent, given their generally tax-inefficient access to overseas liquidity, operational requirements, the uncertainties endemic to the technology sector in general and company-specific strategic considerations," Moody's said in a news release.

In addition to Dell, tech giants that have instituted quarterly dividend payments in the last two years include, Cisco Systems Inc., Oracle Corp. and Apple Inc. The industry has faced demands to begin to return capital to shareholders because major players have amassed tens of billions of dollars of cash on their balance sheets and haven't found ways to re-deploy the money effectively.

Among the biggest dividend payers in tech last year, Microsoft Corp. paid $5.7-billion, Intel Corp. paid $4.1-billion and IBM Corp. paid $3.4-billion. Apple will make its first payment for its quarter ended Sept. 30. Based on current numbers, Apple's payout over a full year would reach nearly $10-billion, higher than Exxon-Mobil's estimated $9-billion dividend and just behind AT&T's $10.2-billion dividend, Moody's notes.

Among the major tech players still not making quarterly dividend payments are Amazon.com Inc., Google Inc. and eBay Inc.

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