The board of directors of
) recently raised the company's quarterly cash dividend by 20% to
42 cents per share on its common stock. The hike will be
effective from the day of declaration. Following this the company
also increased its share repurchase agreement by $5.0 billion,
bringing the recent authorization to $7.8 billion.
We believe the rise in dividend is due to huge cash reserve of
the company. Qualcomm expects its long-term growth to continue at
this rate due to increased demand for tablets and smartphones
coupled with aggressive deployment of 4GLTE networks, most of
which are using the chipset of Qualcomm's Snapdragon
This is the company's ninth dividend increase in the last five
years. The company has been paying dividends uninterruptedly for
the last 12 years. The current dividend yield is 2.2%.
Qualcomm possesses a strong balance sheet with $31,610 million
of cash and marketable securities. The excess cash available with
the company will be utilized to acquire companies or to pay
) pose significant competitive threat to Qualcomm. Recently, the
all three companies paid quarterly dividends of 12 cents, 22.5
cents and 8.5 cents, with dividend yields of 1.6%, 3.6% and 1.8%,
respectively, clearly below Qualcomm's dividend payout.
The company's revenues in the recently concluded quarter
increased 10% year over year to $6,622 million. Notably, Qualcomm
shipped approximately 213 million CDMA-based MSM chipsets in the
first quarter of fiscal 2014, up 17% year over year. The
management also increased its financial outlook for fiscal
Currently, Qualcomm carries a Zacks Rank #3 (Hold).
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