Tech stocks have taken center stage this year, exemplified by the NASDAQ Composite's impressive 41.2% year-to-date gain, surpassing the SPDR S&P 500's 24.2% returns. The tech industry's prosperity is attributed to heightened technology adoption across diverse sectors, coupled with a growing appetite for hardware and outsourcing solutions fueled by emerging technologies.
Therefore, I present three top-rated tech stocks Accenture plc (ACN), Dell Technologies Inc. (DELL), and Brother Industries, Ltd. (BRTHY), which are poised for gains this week.
Businesses are making substantial investments in digital transformation initiatives to bolster efficiency and competitiveness, boosting the tech industry. The information technology market is anticipated to reach $1.36 trillion by 2029 at a CAGR of 14.7%.
Moreover, the surge in remote work has intensified the reliance on IT infrastructure and cybersecurity solutions, prompting organizations to invest in hardware upgrades that support seamless connectivity and robust security measures. As a result, the IT hardware industry is expected to grow from $121.32 billion this year to $177.11 billion by 2028, at a CAGR of 7.9%.
Additionally, the electronic market is on the rise with widespread adoption of electronic products for non-commercial use. Also, the trend towards miniaturization of electronic products, emphasizing portability and lightweight design, is gaining rapid popularity worldwide. Robust investments in global distribution networks further propel the consumer electronics industry's growth.
The U.S. consumer electronic industry is predicted to touch $293.81 billion by 2032, growing at a CAGR of 5.1%.
Furthermore, technology has evolved into a competitive advantage for organizations, with IT outsourcing now going beyond mere cost reduction. Besides, the increasing popularity of cloud services is driving a growing demand for flexible solutions, which is proving advantageous for the outsourcing industry.
The IT outsourcing market is expected to grow significantly, from $585.60 billion in 2023 to $764.63 billion by 2028, growing at a 5.5% CAGR.
Considering these conducive trends, let's take a look at the fundamentals of the three best tech stocks.
In light of these encouraging trends, let’s look at the fundamentals of the three above-mentioned tech stocks.
Accenture plc (ACN)
Based in Dublin, Ireland, ACN is a professional services company that provides strategy and consulting, industry X, song, and technology and operation services. The company offers various services, including application services, intelligent automation, application management, software engineering, strategy and consulting, data and analytics, metaverse, and sustainability services.
On December 21, 2023, ACN agreed to acquire Jixie, a media and marketing technology company based in Singapore. Jixie's intelligent digital marketing platform will be integrated into ACN, specifically within Accenture Song—the tech-powered creative group.
This integration aims to enhance ACN's marketing transformation capabilities, allowing Indonesian clients to deliver more personalized experiences for improved customer engagement and sustainable business growth.
On November 15, the company paid a quarterly cash dividend of $1.29 per share to its shareholders, totaling $810 million. Moreover, the company declared another quarterly cash dividend of $1.29 per share, which is payable on January 18, 2024.
It pays an annual dividend of $5.16, yielding 1.51% on the current market price. Its dividend payouts have grown at a CAGR of 12.3% over the past three years.
In the fiscal first quarter that ended November 30, 2023, ACN’s revenues increased 3% year-over-year to $16.22 billion. The company’s adjusted operating income amounted to $2.70 billion. Its adjusted net income came in at $2.12 billion, and its adjusted EPS rose 6% from the year-ago quarter to $3.27.
For fiscal year 2024, ACN anticipates its revenue growth to be in the range of 2% to 5% in local currency. The company targets an adjusted operating margin of 15.5% to 15.7%, up 10 to 30 basis points from the previous year. Moreover, adjusted EPS is expected to be $11.97 to $12.32, a 3% to 6% increase. The company aims to return at least $7.70 billion in cash to shareholders through dividends and share repurchases.
ACN’s EPS and revenue are expected to increase 4.7% and 3.4% year-over-year to $12.21 and $66.26 billion, respectively in the current fiscal year ending August 2024. On top of it, the company has an impressive earning surprise history, surpassing the consensus EPS and revenue estimates in three of the trailing four quarters.
Over the past nine months, the stock has gained 34.4% to close the last trading session at $339.50. It has returned 29.6% over the past year.
ACN’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted optimally.
It also has an A grade for Quality and a B for Stability and Sentiment. Among nine stocks in the A-rated Outsourcing – Tech Services industry, ACN is ranked #3.
To see ACN’s Growth, Value, and Momentum ratings, click here.
Dell Technologies Inc. (DELL)
DELL designs, develops, manufactures, markets, sells, and supports various comprehensive and integrated solutions, products, and services in the Americas, Europe, the Middle East, Asia, and internationally. The company operates through two segments, Infrastructure Solutions Group (ISG) and Client Solutions Group (CSG).
On December 19, DELL announced pricing terms for its cash tender offers, expecting to accept $350 million in 3.450% Senior Notes due 2051 and $150 million in 8.350% Senior Notes due 2046.
On December 14, DELL revealed that CoreWeave, a specialized cloud provider for large-scale NVIDIA GPU-accelerated workloads, had acquired thousands of Dell PowerEdge servers to enhance access to computational power for organizations focusing on AI and generative AI (GenAI) innovation.
The collaboration aims to meet the growing demand for high-performance cloud solutions driven by AI, offering scalable computing for large models.
In the current month, DELL declared a quarterly cash dividend of $0.37 per common share, which will be payable on Feb. 2, 2024. Its annual dividend of $1.44 yields 2.01% on the current market price, higher than the four-year average of 0.91%.
DELL’s total net revenue for the fiscal third quarter ended November 3, 2023, came in at $22.25 billion, including product revenue of $16.23 billion and service revenue of $6.02 billion. Its non-GAAP operating expenses declined 5% year-over-year to $3.31 billion. The company’s non-GAAP net income stood at $1.39 billion and $1.88 per share.
Analysts expect DELL’s revenue and EPS to rise 3.3% and 10.1% year-over-year to $21.62 billion and $1.44 in the fiscal fourth quarter ending January 2024. Moreover, the company beat the consensus EPS estimates in each of the trailing four quarters, which is remarkable.
Shares of DELL have gained 85.9% over the past year and 46.8% over the past six months to close the last trading session at $72.42.
DELL’s POWR Ratings reflect this solid outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.
DELL also has an A grade for Momentum and a B for Growth, Value, and Sentiment. It is ranked #8 out of 37 stocks in the A-rated Technology – Hardware industry.
Click here for the additional POWR Ratings for Stability and Quality for DELL.
Brother Industries, Ltd. (BRTHY)
Headquartered in Nagoya, Japan, BRTHY manufactures and sells communications and printing equipment in Japan, the Americas, Europe, Asia, Oceania, the Middle East, Africa, and internationally. It operates through Printing & Solutions; Machinery; Domino; Nissei; Personal & Home; and Network & Contents segments.
On November 24, 2023, BRTHY announced that its subsidiary in the Philippines, BROTHER INDUSTRIES (PHILIPPINES), INC., had achieved Platinum certification from the Responsible Business Alliance (RBA), a global organization promoting corporate social responsibility.
The RBA certification underscores the company's commitment to responsible value chains, contributing to a sustainable society through ethical and environmentally responsible business practices.
With a four-year average dividend yield of 3.07%, BRTHY distributes $0.91 annually as dividends, which yields 2.68% on the prevailing price level.
During the fiscal second quarter that ended September 30, 2023, BRTHY’s revenue increased 1.2% year-over-year to ¥199.23 billion ($1.37 billion). The company’s operating profit rose 42.2% over the prior year’s quarter to ¥17.70 billion ($123.22 million). Moreover, its profit for the period and EPS amounted to ¥12.66 billion ($88.14 million) and ¥49.39.
Street expects BRTHY’s revenue to increase 65.7% year-over-year to $5.68 billion in the fiscal year ending March 2024.
Over the past nine months, the stock has gained 12.6% to close the last trading session at $32.62.
It’s no surprise that BRTHY has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
It has an A grade for Momentum and Stability and a B for Value and Quality. Within the B-rated Technology – Electronics industry, it is ranked first out of 39 stocks.
Beyond what we stated above, we also have given BRTHY grades for Growth and Sentiment. Get all the BRTHY ratings here.
What To Do Next?
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ACN shares were trading at $342.25 per share on Thursday morning, up $2.75 (+0.81%). Year-to-date, ACN has gained 30.30%, versus a 24.97% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Top-Rated Tech Stocks to Buy Poised for Gains This Week StockNews.com
