Why NASDAQ:QCOM provides a good dividend, while having solid fundamentals.

Take a closer look at QUALCOMM INC (NASDAQ:QCOM), a stock of interest to dividend investors uncovered by our stock screener. NASDAQ:QCOM excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Deciphering NASDAQ:QCOM's Dividend Rating

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:QCOM has received a 7 out of 10:

• Compared to an average industry Dividend Yield of 2.33, QCOM pays a better dividend. On top of this QCOM pays more dividend than 90.74% of the companies listed 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 their dividend for at least 10 years, which is a reliable track record.
• 36.35% of the earnings are spent on dividend by QCOM. This is a low number and sustainable payout ratio.
• The dividend of QCOM is growing, but earnings are growing more, so the dividend growth is sustainable.

Assessing Health Metrics for NASDAQ:QCOM

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:QCOM scores a 7 out of 10:

• QCOM has an Altman-Z score of 5.97. 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 5.97, QCOM is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
• QCOM has a debt to FCF ratio of 1.31. This is a very positive value and a sign of high solvency as it would only need 1.31 years to pay back of all of its debts.
• QCOM's Debt to FCF ratio of 1.31 is fine compared to the rest of the industry. QCOM outperforms 76.85% of its industry peers.
• Even though the debt/equity ratio score it not favorable for QCOM, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• QCOM has a Current Ratio of 2.40. This indicates that QCOM is financially healthy and has no problem in meeting 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:

• With an excellent Return On Assets value of 18.39%, QCOM belongs to the best of the industry, outperforming 92.59% of the companies in the same industry.
• QCOM has a Return On Equity of 38.60%. This is amongst the best in the industry. QCOM outperforms 94.44% of its industry peers.
• QCOM has a better Return On Invested Capital (18.14%) than 91.67% of its industry peers.
• QCOM had an Average Return On Invested Capital over the past 3 years of 21.90%. This is significantly above the industry average of 11.13%.
• Looking at the Profit Margin, with a value of 26.03%, QCOM belongs to the top of the industry, outperforming 87.04% of the companies in the same industry.
• QCOM's Profit Margin has improved in the last couple of years.
• QCOM has a better Operating Margin (26.32%) than 86.11% of its industry peers.
• In the last couple of years the Operating Margin of QCOM has grown nicely.
• QCOM has a better Gross Margin (56.22%) than 77.78% of its industry peers.

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

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.