Exploring Qualcomm Inc's Dividend Sustainability and Growth Prospects
Qualcomm Inc (QCOM, Financial) recently announced a dividend of $0.85 per share, scheduled for payment on June 20, 2024, with the ex-dividend date set for May 30, 2024. As investors anticipate this upcoming disbursement, attention is also drawn to the company's historical dividend performance, yield, and growth rates. Utilizing data from GuruFocus, this analysis delves into the sustainability and growth prospects of Qualcomm Inc's dividends.
What Does Qualcomm Inc Do?
Qualcomm designs and licenses wireless technology and manufactures chips for smartphones. The company's essential patents involve CDMA and OFDMA technologies, crucial in all 3G, 4G, and 5G networks. Qualcomm's intellectual property is licensed by nearly all wireless device manufacturers. Additionally, it leads as the world's top wireless chip vendor, providing advanced processors to major handset makers, and also markets RF-front end modules for smartphones, along with chips for automotive and Internet of Things sectors.
A Glimpse at Qualcomm Inc's Dividend History
Since 2003, Qualcomm Inc has consistently paid dividends, currently on a quarterly basis. The company has increased its dividend annually since that time, earning it the status of a dividend achiever—a recognition given to companies that have raised their dividends for at least 21 consecutive years.
Breaking Down Qualcomm Inc's Dividend Yield and Growth
Currently, Qualcomm Inc boasts a trailing dividend yield of 1.51% and a forward dividend yield of 1.61%, indicating expected dividend increases over the next year. However, with a yield near a 10-year low and underperforming 46.95% of global competitors in the Semiconductors industry, it may not appeal strongly to income-focused investors.
Over the past three years, Qualcomm Inc's annual dividend growth rate was 6.90%, which slowed to 5.30% over five years, and averaged 8.50% over the past decade. The 5-year yield on cost for Qualcomm Inc stock is approximately 1.95% today.
The Sustainability Question: Payout Ratio and Profitability
The dividend payout ratio, which stands at 0.40 as of March 31, 2024, suggests that Qualcomm retains a substantial portion of its earnings for growth and stability. The company's profitability rank, at 9 out of 10, underscores its earnings strength relative to peers, with net profit reported in 9 of the past 10 years.
Growth Metrics: The Future Outlook
Qualcomm Inc's robust growth rank of 9 out of 10 reflects its favorable growth trajectory compared to competitors. Its revenue per share and a 3-year revenue growth rate of approximately 15.80% per year outperform about 70.05% of global competitors, indicating a strong revenue model. Additionally, Qualcomm Inc's 3-year EPS growth rate of about 12.50% per year surpasses about 54.24% of global peers, essential for sustaining long-term dividends.
In conclusion, Qualcomm Inc's consistent dividend increases, combined with a solid payout ratio and robust profitability and growth metrics, suggest a promising outlook for dividend sustainability and growth. Investors looking for stable dividend-paying stocks might find Qualcomm Inc an attractive option, despite its current low yield in comparison to industry peers. For more insights and tools for dividend stock screening, GuruFocus Premium users can utilize the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
