Why QUALCOMM INC (NASDAQ:QCOM) is a Top Pick for Dividend Investors.

Our stock screener has spotted QUALCOMM INC (NASDAQ:QCOM) as a good dividend stock with solid fundamentals. NASDAQ:QCOM shows decent health and profitability. At the same time it gives a good and sustainable dividend. We'll dive into each aspect below.

What does the Dividend looks like for NASDAQ:QCOM

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NASDAQ:QCOM earns a 7 out of 10:

• Compared to an average industry Dividend Yield of 2.21, QCOM pays a better dividend. On top of this QCOM pays more dividend than 90.65% of the companies listed in the same industry.
• QCOM has paid a dividend for at least 10 years, which is 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.
• QCOM pays out 35.38% of its income as dividend. This is a sustainable payout ratio.
• QCOM's earnings are growing more than its dividend. This makes the dividend growth sustainable.

How We Gauge Health for NASDAQ:QCOM

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:QCOM, the assigned 7 for health provides valuable insights:

• An Altman-Z score of 6.15 indicates that QCOM is not in any danger for bankruptcy at the moment.
• QCOM's Altman-Z score of 6.15 is fine compared to the rest of the industry. QCOM outperforms 68.22% of its industry peers.
• QCOM has a debt to FCF ratio of 1.14. This is a very positive value and a sign of high solvency as it would only need 1.14 years to pay back of all of its debts.
• QCOM's Debt to FCF ratio of 1.14 is fine compared to the rest of the industry. QCOM outperforms 74.77% of its industry peers.
• A Debt/Equity ratio of 0.49 indicates that QCOM is not too dependend on debt financing.
• 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.
• QCOM has a Current Ratio of 2.62. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

What does the Profitability looks like for NASDAQ:QCOM

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:QCOM was assigned a score of 9 for profitability:

• With an excellent Return On Assets value of 18.99%, QCOM belongs to the best of the industry, outperforming 92.52% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 39.27%, QCOM belongs to the top of the industry, outperforming 93.46% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 18.89%, QCOM belongs to the top of the industry, outperforming 91.59% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for QCOM is significantly above the industry average of 11.63%.
• QCOM's Profit Margin of 25.94% is amongst the best of the industry. QCOM outperforms 85.98% of its industry peers.
• In the last couple of years the Profit Margin of QCOM has grown nicely.
• QCOM has a better Operating Margin (26.80%) than 85.98% 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 55.99%, QCOM is doing good in the industry, outperforming 76.64% of the companies in the same industry.

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

Check the latest full fundamental report of QCOM for a complete fundamental analysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.