Dell Technologies (NYSE:DELL) is expecting some consistent growth over the long haul, but investors shouldn’t expect its top line to take off due to artificial intelligence (AI). That’s what the company told investors earlier this month when it said that it projects long-term growth of around 3% to 4% per year.
The PC market hasn’t been strong this year and the company has had to layoff 6,000 jobs earlier this year to combat challenging economic conditions. Investors have nonetheless been bullish on Dell likely due to the potential opportunities for the business in AI. Year to date, shares of Dell are up more than 65%. But at 26 times its trailing earnings, this isn’t a cheap stock anymore.
This could be an encouraging play for income investors, however. The good news is that Dell expects to raise its dividend by at least 10% each year through to fiscal 2028. This is already an above-average dividend stock as Dell yields 2.2%, which is higher than the S&P 500 average of 1.6%.
While this may not be a great growth stock to own right now as Dell’s sales were down 13% last quarter and the immediate outlook doesn’t look too promising as inflation continues to impact the economy. But if you’re a dividend investor, this can be a good buy as Dell offers a solid, growing yield. And even if it doesn’t generate huge growth in the years ahead, as long as the bottom line is improving, which it should be, this can make for an excellent dividend stock to buy and hold.
