QUALCOMM INC (NASDAQ:QCOM) was identified by our Decent Value stock screener as an attractive candidate for value investors. The company combines solid profitability and financial health with a reasonable valuation, making it stand out in the semiconductor industry.
Valuation: Undervalued Compared to Peers
QCOM’s valuation metrics suggest the stock is priced attractively:
- P/E Ratio of 13.96 – Cheaper than 90% of its industry peers.
- Forward P/E of 12.90 – Below the S&P 500 average of 21.76.
- Price/Free Cash Flow – Ranks better than 93.6% of competitors.
The company’s PEG ratio, which accounts for growth, also indicates a potentially undervalued position.
Strong Profitability
QCOM earns high marks for profitability, with key strengths including:
- Return on Equity (ROE) of 39.82% – Outperforming 93.6% of semiconductor firms.
- Operating Margin of 27.64% – Better than 87.3% of industry peers.
- Consistent Earnings Growth – EPS has grown by 24.2% over the past year.
Solid Financial Health
The company maintains a stable balance sheet:
- Low Debt Levels – Debt-to-FCF ratio of 1.25 suggests manageable obligations.
- Strong Liquidity – Current ratio of 2.73 and quick ratio of 2.08 indicate ample short-term coverage.
- Altman-Z Score of 6.27 – Well above bankruptcy risk thresholds.
Growth Prospects
While future growth expectations are moderate, QCOM has demonstrated strong historical performance:
- Revenue Growth (16.15% YoY) – Outpaces many peers.
- EPS Growth (24.23% YoY) – Reflects efficient earnings expansion.
Dividend Appeal
QCOM also offers income potential:
- Dividend Yield of 2.19% – Slightly above the industry average.
- 10+ Years of Dividend Payments – A reliable track record for income investors.
Our Decent Value screener lists more stocks with similar characteristics. For a deeper dive, review the full fundamental report on QCOM.
Disclaimer
This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.
