) was one of the great growth stories of the 1999 dot-com boom.
Its stock blasted out of a base and soared more than 2,000%
before finishing its big move with a spectacular climax run.
Times have changed. Today, Qualcomm is still on the cutting
edge, but it's a mature company that pays a dividend.
Qualcomm makes chips and software for cellphones, whose
carriers use either a CDMA or GSM platform. Most U.S. providers,
such asVerizon (
), use CDMA.AT&T (
) and the rest of the world use GSM.
Qualcomm's chips are found in the iPhone and Samsung Galaxy
and other Android devices.
In the most recent quarter, earnings fell 20% amid fears of
slowing smartphone sales. But the stock quickly recovered and has
moved higher despite a weaker market.
Analysts expect earnings to increase just 4% in the next
report, but they see a 14% rise for the full year and a 12%
increase in 2015.
The five-year annualized EPS growth rate is 21% and the
Earnings Stability Factor is 6 on a 0 to 99 scale, with low
numbers corresponding to steady earnings growth.
Qualcomm is in a hot industry group. As of Tuesday's IBD, the
Electronics-Semiconductor Fabless industry group was ranked No.
13 out of 197 industry groups tracked by IBD. It was ranked No.
32 just six weeks ago.
The return on equity was an impressive 23% in 2013, well above
the 17% benchmark investors should look for.
The company has no long-term debt.
Pretax margins last year were 38%, although that's the lowest
in several years.
Qualcomm has offered a dividend since 2003, when it paid out
2.5 cents per share per quarter, adjusted for a stock split. That
works out to a 2.1% annual yield.
The dividend is now 42 cents. The next dividend will be paid
out June 25 to shareholders of record on June 2.