Is QUALCOMM INC (NASDAQ:QCOM) suited for dividend investing?

Consider QUALCOMM INC (NASDAQ:QCOM) as a top pick for dividend investors, identified by our stock screening tool. QCOM shines in terms of profitability, solvency, and liquidity, all while paying a decent dividend. Let's dive deeper into the analysis.

ChartMill's Evaluation of Dividend

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. QCOM has received a 7 out of 10:

• QCOM's Dividend Yield is rather good when compared to the industry average which is at 2.75. QCOM pays more dividend than 89.09% of the companies 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 34.21% of its income as dividend. This is a sustainable payout ratio.
• The dividend of QCOM is growing, but earnings are growing more, so the dividend growth is sustainable.

Exploring QCOM's Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. QCOM has earned a 8 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 69.09% of the companies in the same industry.
• QCOM has a debt to FCF ratio of 1.25. This is a very positive value and a sign of high solvency as it would only need 1.25 years to pay back of all of its debts.
• QCOM's Debt to FCF ratio of 1.25 is fine compared to the rest of the industry. QCOM outperforms 73.64% of its industry peers.
• QCOM has a Debt/Equity ratio of 0.48. This is a healthy value indicating a solid balance between debt and equity.
• 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 2.73. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.
• QCOM has a Quick Ratio of 2.08. This indicates that QCOM is financially healthy and has no problem in meeting its short term obligations.

How do we evaluate the Profitability for 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. QCOM was assigned a score of 9 for profitability:

• With an excellent Return On Assets value of 19.94%, QCOM belongs to the best of the industry, outperforming 93.64% of the companies in the same industry.
• QCOM has a better Return On Equity (39.82%) than 93.64% of its industry peers.
• The Return On Invested Capital of QCOM (20.15%) is better than 92.73% 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 11.19%.
• With an excellent Profit Margin value of 26.11%, QCOM belongs to the best of the industry, outperforming 86.36% of the companies in the same industry.
• QCOM's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 27.64%, QCOM belongs to the top of the industry, outperforming 87.27% of the companies in the same industry.
• In the last couple of years the Operating Margin of QCOM has grown nicely.
• With a decent Gross Margin value of 55.68%, QCOM is doing good in the industry, outperforming 77.27% of the companies in the same industry.

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

For an up to date full fundamental analysis you can check the fundamental report of QCOM

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.