Text

Text

3 High-Yield Internet of ThingsStocks to Buy in 2017

Image source: Cisco.

Cisco Systems

Cisco's leading position in networking hardware and data centers and its Jasper IoT connectivity management platform make the company one of the most likely beneficiaries of the connectivity boom.

Image source: Cisco.

In addition to tailoring its routing and switching hardware to meet the demands of IoT, Cisco is distributing software and certifications to get big customers on board with its network and facilitate its transition to a more subscription-based revenue model. Image source: Cisco.

Cisco's strength in networking makes it one of the most likely companies to deliver optimal solutions to the security and standardization challenges that threaten to impede the development of the Internet of Things.

The company also has a great balance sheet with roughly $40 billion in cash and short-term investments on the books.

Image source: Cisco.

Cisco Systems dividend profile and valuation

Yield Years of Dividend Growth

Payout Ratio

Dividend Growth Over Last 5 Years

Free Cash Flow (TTM)

3.5% 6 48% 225% $12.38 billion

Cisco Systems is priced at roughly 12.5 times forward earnings projections.

IBM

IBM's strength in artificial intelligence and analytics has it in position to benefit from the growth of the Internet of Things.

The company was recently named a software leader in the Forrester Wave: IoT Software Platforms report.

Image source: IBM.

Artificial intelligence and machine learning will be essential to maximize value from the massive amounts of new data generated by the Internet of Things. The company's Watson IoT platform manages devices, analyzes data, and uses machine learning to produce insights.

Image source: Pixabay.

The company’s transition away from its hardware business appears to be ahead of schedule, with the company’s IoT, cloud, analytics, social, and security businesses now accounting for roughly 40% of revenues.

Demand for IBM’s infrastructure-as-a-service offerings should grow with the evolution of IoT, and the company also has a deep array of patents -- with 31% concentrated in cloud, analytics, and cognitive computing technologies

Image source: IBM.

IBM dividend profile and valuation

Yield Years of Dividend Growth

Payout Ratio

Dividend Growth Over Last 5 Years

Free Cash Flow (TTM)

3.4% 17 41.5% 87% $14.47 billion

IBM is priced at roughly 12 times forward earnings projections.

Qualcomm

Qualcomm’s leading position in mobile, momentum in connected cars, and valuable patents make the company a likely winner in the Internet of Things.

Image source: Qualcomm.

Even before the acquisition of NXP Semiconductor, a study from LexInnova indicated that Qualcomm has the most valuable portfolio of IoT patents. The company's expertise in low-power-consumption chips is also well-suited to IoT.

Image source: Qualcomm.

Qualcomm’s $39 billion acquisition of NXP Semiconductors makes it the leader in chips for connected automobiles -- one of the fastest-growing IoT segments. NXP currently has a 14.5% market share in automotive chips and estimates the market will have grown 29% from 2015 to 2019.

Qualcomm’s growing position in automotive chips and solid mobile business suggests it’s poised to continue leading the semiconductor space and benefiting from connectivity growth.

Qualcomm dividend profile and valuation

Yield Years of Dividend Growth

Payout Ratio

Dividend Growth Over Last 5 Years

Free Cash Flow (TTM)

3.2% 14 51% 146.5% $6.86 billion

Qualcomm is priced at roughly 14 times forward earnings projections.

The next billion-dollar iSecret The world's biggest tech company forgot to show you something at its recent event, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-

new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early-in-

the-know investors! To be one of them, just click here.