QUALCOMM Incorporated (NASDAQ: QCOM) is dedicated to the development and production of basic electronics for mobile, wireless, network and other consumer devices. The company is also notably involved in the expansion of 5G infrastructure solutions and investors see it as a growth path.
As Qualcomm matures, we’ll take a look at how they maintain profitability and return profits to shareholders.
It is important to note that Qualcomm has a history of reliable dividend payments dating back to 2003 and has been steadily increasing its dividend per share since.
The company has also returned around 1.6% of its market capitalization to shareholders in the form of share buybacks over the past year.
Check out our latest analysis for QUALCOMM.
QUALCOMM covers its dividend with profits
Reliable dividend payments and stable returns build long-term investor confidence. Qualcomm is a reliable company, now inclined to participate in 5G market share.
The best dividends are those that are well covered by the company’s profits.
Prior to making this announcement, QUALCOMM was easily earning enough to cover the dividend. This means that most of what the business earns is kept and used to help it grow.
If the dividend continues according to recent trends, we estimate that the payout ratio will be 31% by 2024, which is in the range that puts us at ease with the sustainability of the dividend.
NasdaqGS: QCOM Historic dividend May 29, 2021
QUALCOMM has a solid experience
The company has been paying a dividend for a long time, and it’s fairly stable, which gives us confidence in the future dividend potential.
Qualcomm has a sufficiently long and reliable dividend history.
The first annual payment in the past 10 years was US $ 0.76 in 2011, and the most recent year’s payment was US $ 2.72. This implies that the company has increased its distributions at an annual rate of approximately 14% over this period.
We can see that payments have shown very nice upward momentum without weakening, but they can now level off as analysts are not forecasting any major revenue growth rate for the company going forward.
This isn’t necessarily bad, as the stock price and dividend payouts could both stabilize and increase investor confidence when considering adding this stock to their portfolio.
The dividend has room to grow
QUALCOMM has seen its EPS increase over the past five years, to 17% per year.
A low payout rate and decent growth suggest that the company is reinvesting well, and it has the ability to increase the dividend over time.
Overall, we think this could be an attractive dividend-paying stock.
It’s rare to find a company that has increased its dividends rapidly over 10 years and hasn’t suffered a noticeable reduction, but QUALCOMM has, which we really love.
The company easily earns enough to cover its dividend payments, and it’s great to see that those profits translate into cash flow for investors.
Investors generally tend to favor companies with a consistent and stable dividend policy over those that operate irregularly.
Meanwhile, despite the importance of dividend payments, they aren’t the only factors our readers should be aware of when valuing a business. For example, we have selected 1 warning sign for QUALCOMM that investors should be aware of before committing capital to this stock. We have also set up a list of global stocks with a solid dividend.
If you are looking to trade QUALCOMM, open an account with the cheapest * professional approved platform, Interactive Brokers. Their clients from more than 200 countries and territories trade stocks, options, futures, currencies, bonds and funds around the world from a single integrated account.
Simply Wall St analyst Goran Damchevski and Simply Wall St have no positions in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material.
*Interactive Brokers Ranked Least Expensive Broker By StockBrokers.com Online Annual Review 2020
Do you have any feedback on this item? Are you worried about the content? Contact us directly. You can also send an email to Editorialemail@example.com