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What are we looking for?

Providers of work-from-home technology that offer sustainable dividends.

The screen

The global push to slow the spread of COVID-19 by working from home highlights the bright outlook for tech firms that provide software and services for remote work.

Two of the most prominent software providers – videoconferencing specialist Zoom Video Communications Inc. and project-collaboration leader Slack Technologies Inc. – don’t pay dividends. However, other players do.

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How long the shift to remote work will last is unknown. But the trend has already demonstrated to corporations the potential for productivity gains and improved employee satisfaction.

Our search started with U.S. dividend payers offering well-established software and services that could gain from the trend.

We then applied our TSI Dividend Sustainability Rating System. It awards points to a stock based on key factors: One point for five years of continuous dividend payments – two points for more than five; two points if it has raised the payment in the past five years; one point for management’s commitment to dividends; one point for operating in non-cyclical industries; one point for limited exposure to foreign currency rates and freedom from political interference; two points for a strong balance sheet, including manageable debt and adequate cash; two points for a long-term record of positive earnings and cash flow sufficient to cover dividend payments; one point if the company is a leading in its industry.

Companies with 10 to 12 points have the most secure dividends, or the highest sustainability.

Those with seven to nine points have above average sustainability; average sustainability is four to six points; and below average sustainability is one to three points.

More about TSI Network

TSI Network is the online home of The Successful Investor Inc. – the group of widely followed Canadian investment newsletters by editor and publisher Pat McKeough. They include our award-winning flagship newsletter, The Successful Investor. The TSI Best ETFs for Canadian Investors is the latest. TSI Network is also affiliated with Successful Investor Wealth Management.

What we found

Our TSI Dividend Sustainability Rating System generated five stocks.

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Microsoft Teams, from Microsoft Corp., counts many major corporations among customers for its remote chat and communications tools.

LogMeIn Inc.’s suite of online meeting and sharing software includes GoToMeeting and GoToWebinar.

Cisco Systems Inc.’s WebEx product offers video conferencing, online meetings, screen sharing and more.

From another angle, Citrix Systems Inc. provides virtual-desktop technology, which makes it possible for employees to access corporate programs and data when they’re offsite.

Cloud computing services by IBM provide data storage and security for leading companies that embrace work-from-home technology.

We advise investors to do additional research on any investments we identify below.

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Companies that offer work-from-home solutions

Ranking*CompanyTickerShare price $1-Year Total Return % Market cap ($ bil)Div. Yield %PointsDividend Sustainability Rating
1Microsoft Corp.MSFT-Q140.4022.11,114.81.410Highest
2Cisco Systems Inc.CSCO-Q37.35-30.2150.63.99Above Average
3IBM Corp.IBM-N103.55-26.294.76.38Above Average
4Citrix Systems Inc.CTXS-Q130.5029.215.61.17Above Average
5LogMeIn Inc.LOGM-Q78.15-5.63.91.76Average

Source: Dividend Advisor

*Ranking is determined by TSI Dividend Sustainability Score. Where overall points are the same, analysts considered P/E, dividend yield and industry outlook to decide final placements.

Scott Clayton, MBA, is senior analyst for TSI Network and associate editor of TSI Dividend Advisor.

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