Why QUALCOMM INC (NASDAQ:QCOM) qualifies as a good dividend investing stock.

QUALCOMM INC (NASDAQ:QCOM) is a hidden gem unveiled by our stock screening tool, featuring a promising dividend outlook alongside solid fundamentals. QCOM demonstrates decent financial health and profitability while ensuring a sustainable dividend. Let's break it down further.

What does the Dividend looks like for 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. 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 3.10. QCOM pays more dividend than 89.91% 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 their dividend for at least 10 years, which is a reliable track record.
• 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.

A Closer Look at Health for 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 QCOM, the assigned 7 reflects its health status:

• QCOM has an Altman-Z score of 5.62. 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 5.62, QCOM is in the better half of the industry, outperforming 66.06% of the companies in the same industry.
• 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.
• With a decent Debt to FCF ratio value of 1.14, QCOM is doing good in the industry, outperforming 74.31% of the companies in the same industry.
• 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.
• A Current Ratio of 2.62 indicates that QCOM has no problem at all paying its short term obligations.

Understanding QCOM's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. QCOM scores a 9 out of 10:

• QCOM has a better Return On Assets (18.99%) than 92.66% of its industry peers.
• With an excellent Return On Equity value of 39.27%, QCOM belongs to the best of the industry, outperforming 92.66% of the companies in the same industry.
• QCOM's Return On Invested Capital of 18.89% is amongst the best of the industry. QCOM outperforms 92.66% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for QCOM is significantly above the industry average of 11.33%.
• With an excellent Profit Margin value of 25.94%, QCOM belongs to the best of the industry, outperforming 86.24% of the companies in the same industry.
• In the last couple of years the Profit Margin of QCOM has grown nicely.
• The Operating Margin of QCOM (26.80%) is better than 86.24% of its industry peers.
• QCOM's Operating Margin has improved in the last couple of years.
• QCOM's Gross Margin of 55.99% is fine compared to the rest of the industry. QCOM outperforms 78.90% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

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

Keep in mind

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.