Why NASDAQ:QCOM qualifies as a good dividend investing stock.

Last update: Jul 29, 2024

Our stock screening tool has identified QUALCOMM INC (NASDAQ:QCOM) as a strong dividend contender with robust fundamentals. NASDAQ:QCOM exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

Dividend Examination for NASDAQ:QCOM

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NASDAQ:QCOM has been awarded a 7 for its dividend quality:

QCOM's Dividend Yield is rather good when compared to the industry average which is at 1.88. QCOM pays more dividend than 90.83% of the companies in the same industry.
QCOM has been paying a dividend for at least 10 years, so it has a reliable track record.
QCOM has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
The dividend of QCOM is growing, but earnings are growing more, so the dividend growth is sustainable.

Assessing Health Metrics for NASDAQ:QCOM

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:QCOM, the assigned 7 reflects its health status:

QCOM has an Altman-Z score of 6.43. This indicates that QCOM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.43, QCOM is in the better half of the industry, outperforming 66.97% of the companies in the same industry.
The Debt to FCF ratio of QCOM is 1.26, which is an excellent value as it means it would take QCOM, only 1.26 years of fcf income to pay off all of its debts.
QCOM has a better Debt to FCF ratio (1.26) than 74.31% of its industry peers.
Although QCOM does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
A Current Ratio of 2.65 indicates that QCOM has no problem at all paying its short term obligations.

Looking at the Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:QCOM has earned a 9 out of 10:

QCOM has a Return On Assets of 15.77%. This is amongst the best in the industry. QCOM outperforms 88.07% of its industry peers.
The Return On Equity of QCOM (34.27%) is better than 94.50% of its industry peers.
The Return On Invested Capital of QCOM (16.23%) is better than 88.07% of its industry peers.
The Average Return On Invested Capital over the past 3 years for QCOM is significantly above the industry average of 10.71%.
The 3 year average ROIC (24.51%) for QCOM is well above the current ROIC(16.23%). The reason for the recent decline needs to be investigated.
The Profit Margin of QCOM (23.03%) is better than 81.65% of its industry peers.
QCOM has a Operating Margin of 24.85%. This is amongst the best in the industry. QCOM outperforms 82.57% of its industry peers.
In the last couple of years the Operating Margin of QCOM has grown nicely.
With a decent Gross Margin value of 55.80%, QCOM is doing good in the industry, outperforming 76.15% of the companies in the same industry.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

Our latest full fundamental report of QCOM contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.