From top: IBM logo at the CeBit trade fair, Hanover, Germany, March 2013 © EPA, MAURITZ ANTIN; HP logo © LM Otero, AP, dapd

Compiled from StockScouter ratings by Verus Analytics

When you think of dividend stocks, you probably think of utilities, oil giants and centuries-old consumer goods companies.

But the fastest dividend growth in the S&P 500 ($INX) actually belongs to the tech sector, where now mature technology companies hold more cash and less debt than any other major industry.

Oakmark Fund manager Bill Nygren says the market isn’t looking at big tech companies the right way – that they have become more like consumer product giants of the 1980s, with steady, if moderate, sales growth at fairly cheap prices. "It's a good place to look for dividends," he told CNBC.

StockScouter, MSN Money’s stock-picking tool, seems to think they’re well-priced, too, with old-line tech companies Hewlett-Packard (HPQ), IBM (IBM) and Oracle (ORCL) all appearing on its latest list of 10 recommended stocks. Not exactly names you would associate with off-the-charts growth, such as Tesla (TSLA) or Plug Power (PLUG). But they still know how to turn patents into profits – and pay investors a 1.3- to 2-percent dividend while they do it. 

In addition, two semiconductor stocks – each paying yields north of 2 percent – made the cut: San Jose, Calif.-based Xilinx (XLNX) and Taiwan Semiconductor Manufacturing (TSM).

Meanwhile, investors seeking more traditional dividend-paying stocks will find a pair of them on this week's StockScouter list: asset management firm Blackstone Group (BX), which pays a 6.8 percent yield, and Annaly Capital Management (NLY), a real estate investment trust (REIT) that pays out 10.7 percent.

Shares of Hewlett-Packard, IBM, Oracle, Xilinx and Taiwan Semiconductor Manufacturing each get a '10' from the StockScouter rating system on MSN Money, the highest score possible. Based on StockScouter's analysis, shares of all five companies are expected to significantly outperform the market over the next six months.

Read the full Scouter reports on Hewlett-Packard here, IBM here, Oracle here, Xilinx here and TSM here.

StockScouter Top 10 for March 14

Company

Sector

Dividend yield

Forward P/E

Scouter score

Assured Guaranty (AGO)

Insurance

1.7%

6.4

10

Franklin Resources (BEN)

Asset management

0.9%

11.910

Blackstone Group (BX)

Asset management

6.8%9.710

Hewlett-Packard (M) 

Computer systems2.0%7.510

International Business Machines (IBM)

Information technology2.0%9.010

KeyCorp (KEY)

Regional banks

1.6%

12.0

10

Annaly Capital Management (NLY)

Real estate investment trust (REIT)

10.7%

6.7

10

Oracle (ORCL)

Software

1.3%

16.1

10

Taiwan Semiconductor Manufacturing (TSM)

Semiconductors

2.1%

28.3

10

Xilinx (XLNX)

Semiconductors

2.2%

20.3

10

StockScouter beats the market

We think the StockScouter rating system developed by Verus Analytics for MSN Money is one of the best tools you can use when you're trying to decide where to invest.

StockScouter looks for stocks whose business fundamentals, price behavior, valuation and stock-ownership characteristics appear to predict a rising price in the future, based on how those factors have influenced stock prices in the past.

The system assigns each stock an expected six-month return and balances that return against the stock's expected volatility.

Scouter rates stocks on a scale of 1 to 10, and ratings can change daily. Ratings and data in the chart above were current as of this article's publication date.

In addition to the daily top 10 list described above, StockScouter is used by investment research firm Verus Analytics (previously known as the quantitative business unit of Gradient Analytics) to generate a monthly benchmark portfolio of stocks that, refreshed monthly, has outperformed the market since its inception in August 2001.

An investor who began in 2001 by investing in each of the benchmark portfolio's top 10 stocks at the start of the month, selling them at the end of the month and then starting fresh with a new group of 10 stocks, would have generated returns, before trading costs and taxes, of 1,044 percent through Feb. 28, 2014.

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Writer Jon Markman, at the time a columnist for MSN Money, collaborated with company researchers on the tool.

Markman suggested rolling over the top 10 stocks every six months to hold down trading costs, a strategy that might be a better fit for most investors; that would yield different results, which would vary based on your starting point.

Performance through Feb. 28, 2014

Full 50 position portfolio    

Index

1 month

3 month

6 month

1 year

Since
inception

Average
annual
return

Portfolio

4.4%

3.7%

15.9%

20.9%

586.7%

17.0%

Nasdaq

5.0%

6.1%

20.0%

36.3%

112.5%

8.1%

S&P 500

4.3%

3.0%

13.9%

22.7%

53.5%

4.6%

DJIA

4.0%

1.5%

10.2%

16.1%

55.1%

4.6%

Top 10 portfolio

Index

1 month

3 month

6 month

1 year

Since
inception

Average
annual return

Portfolio

6.6%

5.8%

12.6%

13.4%

1,043.8%

21.1%

Nasdaq

5.0%

6.1%

20.0%

36.3%

112.5%

8.1%

S&P 500

4.3%

3.0%

13.9%

22.7%

53.5%

4.6%

DJIA

4.0%

1.5%

10.2%

16.1%

55.1%

4.6%

Inception: August 2001