the board of QUALCOMM Incorporated (NASDAQ:QCOM) announced it will increase its dividend to $0.68 on September 23. This brings the dividend yield to 1.9%, which shareholders will be happy with.
Check out our latest analysis for QUALCOMM
QUALCOMM’s dividend is well backed by earnings
If the benefits are not sustainable, a high yield for a few years does not matter much. However, QUALCOMM’s earnings easily cover the dividend. As a result, much of what it earned was reinvested in the company.
Earnings per share are expected to increase by 0.1% in the coming year. If the dividend continues down this path, the payout ratio could be 40% next year, which we believe could be quite sustainable going forward.
QUALCOMM has a solid track record
The company has a long history of paying stable dividends. Since 2011, the dividend has increased from $0.76 to $2.72. This means that the company has grown its payouts at an annual rate of approximately 14% over that period. Rapidly growing dividends over a long period of time is a very valuable asset for an income stock.
Dividend looks likely to grow
Investors may be attracted to the stock based on the quality of its payment history. It is encouraging to see QUALCOMM growing its earnings per share at 17% per year over the past five years. QUALCOMM certainly has the potential to grow its dividend in the future with gains in an uptrend and a low payout ratio.
We really like the QUALCOMM dividend
Overall, we think this could be an attractive income stock, and it’s only going to get better by paying a higher dividend this year. The profit easily covers the distributions and the company generates a lot of money. All in all, this checks many of the boxes we look for when choosing an income stock.
Companies with stable dividend policies are likely to have more investor interest than companies suffering from a more inconsistent approach. At the same time, there are other factors that our readers should be aware of before putting capital into a stock. If we take the debate a little further, we have identified 1 warning sign for QUALCOMM that investors need to be aware to move forward. We also have a list of global stocks with a solid dividend.
This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell stocks and does not take into account your objectives or your financial situation. We strive to provide you with long-term focused analysis powered by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no position in said stocks.
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