The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two key characteristics: strong fundamentals and a valuation that looks cheap. Qualcomm currently holds an above-average position, in the top 50% of the coverage universe, suggesting it’s one of the most “interesting” ideas deserving further investor scrutiny.
10 oversold dividend stocks
But what makes Qualcomm Inc an even more interesting and topical stock to watch is the fact that QCOM’s shares crossed into oversold territory during trading on Friday, trading hands to $133.74 per share. We define oversold territory using the Relative Strength Index, or RSI, a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered oversold if its RSI value is below 30 drops.
In the case of Qualcomm Inc, the RSI value has reached 25.7 – in comparison, the universe of dividend stocks backed by Dividend Channel currently has an average RSI of 46.4. A falling stock price — all else being equal — creates a better opportunity for dividend investors to earn higher returns. Indeed, QCOM’s recent annualized dividend of 2.72/share (currently paid in quarterly installments) equates to an annual return of 1.97% based on the recent share price of $138.40.
A bullish investor might look to QCOM’s 25.7 RSI value today as a sign that recent heavy sells are exhausting themselves and begin to look for buy-side entry opportunities. One of the fundamental data points dividend investors should examine to decide if they are bullish on QCOM is dividend history. In general, dividends are not always predictable; but looking at the historical chart below will help you assess whether the most recent dividend is likely to continue.
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