Qualcomm is one of the largest semiconductor firms in the United States. The technology firm licenses wireless technology to major phone carriers through its substantial patent ownership. The patents reside in the key CDMA and OFDMA technologies. These remain the standards through which the major manufacturers operate in. Qualcomm also provides major producers chip processors. It operates globally. The firm was founded in 1985 and is headquartered in San Diego, California.
Qualcomm has maintained a three-year growth rate of dividends of 12.4 percent. Qualcomm currently ranks 1st in dividend yield within the large cap technology, communication equipment category. The quarterly dividend for the June payment will be $0.57 versus the prior year rate of $0.53 per share. Qualcomm is a member of our Top 100 Dividend Stocks. (see below).
The dividend will be paid at the new higher rate on June 21, 2017, to shareholders of record at close of business on May 31, 2017. Qualcomm Inc. is currently priced at $54.93. Listed in the table below are the quarterly dividend payments since 2010.
Analysis of Qualcomm is based upon our five key criteria for the Top 100 list, which include;
|Dividend Growth (3-7 year avg)||14.9||196|
|S&P Financial Rating||A+||262|
|% Yield||3 Year Div. Growth Rate||7 Year Div. Growth Rate||SPS 2017||P/S Ratio||10 yr P/S Low||10 yr P/S High||5 yr low Yield %||5 yr max Yield %|
- Qualcomm maintains an investment grade rating of A+.
- Qualcomm’s current dividend yield (4.31%) is at the top of its five-year average historical dividend yield.
- Qualcomm maintains a beta of 0.90, lower than the average company.
- Qualcomm is trading at the bottom of its ten-year average price/sales (P/S) ratio.
- Qualcomm’s dividend yield is above that of the S&P 500 Index.
- Qualcomm has paid out a dividend consecutively for the past 14 years.
Latest Earnings & Overall Analysis:
Qualcomm issued its earnings data on April 19th. Qualcomm reported earnings Q2 that came in above analyst expectations. Net income dropped to $749 million in Q2, or 50 cents per share, from $1.16 billion, or 78 cents per share last year. Revenue fell to $5.02 billion from $5.55 billion. Qualcomm had earnings of $1.34 a share. After adjusting the total revenue to account for the arbitration award won by BlackBerry, Qualcomm sales would have come in just short of $6 billion. This was slightly above expectations by analysts. Qualcomm was expected to have sales of $5.8 billion, according to FactSet. Qualcomm Q3 projections account for the great uncertainty from its battle with Apple. Thus, the Q3 projections are very wide, from 67 cents to 92 cents a share.
For Q2, Qualcomm’s revenue from its critical licensing division was up just over 5 percent from a year ago at $2.2 billion. The technology division also had stellar growth, with revenue coming in at $3.6 billion. This was 10 percent higher than the year ago period. The firm was assisted from average prices that were higher during Q2.
The lower future revenue and earnings estimate for Q3 were primarily due to its problem with Apple. Apple’s contract manufacturers underpaid royalties to Qualcomm in Q2. Apple said the firm will continue this negative royalty behavior until it solves its dispute with Qualcomm in court. These underpaid royalties were due to the fact that Qualcomm has not paid Apple under a contract dispute. Much of this is due to the $1 billion dollar lawsuit from Apple. Apple has argued continuously that the firm is charged much higher rates than other providers, like Samsung. Qualcomm has filed a suit against Apple for not meeting its contractual agreements. Qualcomm is also in a battle with South Korea over patent fees and its refusal to license to certain carriers within the country. It also has an ongoing dispute with Blackberry.
The quarter had a big hit to revenue, with a$974 million reduction to revenue due to the negative BlackBerry arbitration decision. This disputes have clouded Qualcomm’s successes, such as its pending acquisition of NXP Semiconductor. Qualcomm has notable new products. This includes its 835 Snapdragon processor. This process is the first to go under the 10 nanometer mark. These products will be used in high-end cell phones such as Samsung Galaxy, LGV20, and HTC phones.
|Earnings per Share||4.44||4.66||5.27||4.51||3.71|
|Earnings per Share 2017 (projected)||$4.35|
Based on the firm’s financial credit rating, elevated dividend yield and low beta, Qualcomm Inc. qualifies as one of our Top 100 Dividend Stocks.
Chart Explanation: Dividend growth stocks may be viewed undervalued when the current yield is above historical readings for the past 5 years.