Why Income Investors Are Paying Attention to QUALCOMM
QUALCOMM Incorporated (NASDAQ:QCOM) is a California-based multinational company that creates semiconductor software and services related to wireless technology. The company is increasingly catching the eye of income-focused investors thanks to its ability to strike a balance between technological innovation and steady income distribution.
An aerial view of a bustling semiconductor production zone showcasing the company's integrated circuits.
QUALCOMM Incorporated (NASDAQ:QCOM) currently pays a quarterly dividend of $0.89 per share, following a 4.7% increase announced in March. This marked its 21st consecutive year of dividend hikes, putting it just four years away from achieving a prestigious Dividend Aristocrat status. While strong cash flow supports this dividend growth, it's the company's prudent payout ratio that truly supports its dividend strength. Over the past five years, QCOM has maintained an average payout ratio of 40%, and its trailing twelve-month figure is even lower at 34.6%. These numbers indicate ample financial flexibility for reinvestment, innovation, and rewarding shareholders.
In the most recent quarter, QUALCOMM Incorporated (NASDAQ:QCOM) spent $2.2 billion on research and development and distributed $938 million in dividends, demonstrating its ability to invest in growth while maintaining consistent shareholder returns. The company closed the quarter with $7.2 billion in cash and equivalents and reported $7.1 billion in operating cash flow, an increase from $6.5 billion a year earlier. As of June 22, QUALCOMM offers a dividend yield of 2.35%.
While we acknowledge the potential of QCOM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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