Qualcomm (QCOM) stock is up more than 10% in Thursday's session after the technology giant beat top- and bottom-line expectations for its fiscal second quarter and reiterated its dividend increase.
In the three months ended March 31, Qualcomm's revenue increased 1.3% from the year-ago period to $9.4 billion. Its earnings per share (EPS) were up 13.5% to $2.44.
"We are pleased to report strong quarterly results, with EPS exceeding the high end of our guidance," Qualcomm CEO Cristiano Amon said in a statement. "We are excited about our continued growth and diversification, including achieving our third consecutive quarter of record QCT Automotive revenues, upcoming launches with our Snapdragon X platforms, and enabling leading on-device AI [artificial intelligence] capabilities across multiple product categories."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The quarterly results handily beat analysts' expectations. According to CNBC, Wall Street was expecting revenue of $9.3 billion and EPS of $2.32.
Qualcomm, which makes chips and wireless telecommunications parts for Android and iPhone devices, also provided its outlook on its fiscal third quarter, which exceeds analysts' forecast. The company expects revenue in the range of $8.8 billion to $9.6 billion and EPS in the range of $2.15 to $2.35. This compares with Wall Street's outlook for revenue of $9.1 billion and EPS of $2.17, according to CNBC.
Why Qualcomm's dividend hike matters
Notably, Qualcomm's earnings report included news that it hiked its dividend over the three-month period. The announcement was first made in early March that the company would increase its quarterly dividend by 6.3% to 85 cents per share quarterly, equating to an annualized dividend of $3.40 per share. QCOM is one of the top dividend stocks around, having hiked its annual payout for 21 straight years.
"Shares in companies that raise their payouts like clockwork decade after decade can produce superior total returns (price change plus dividends) over the long run," writes Dan Burrows, senior investing editor at Kiplinger, in his feature on Wall Street's best dividend stocks.
Additionally, companies that consistently grow their dividends can offer investors peace of mind, Burrows adds. "After all, any company that manages to raise its dividend year after year – through recession, war, market crashes and more – is demonstrating both its financial resilience and its commitment to returning cash to shareholders."
Where does Qualcomm stand with analysts?
According to S&P Global Market Intelligence, the consensus analyst target price for QCOM stock is $182.62, a slight premium to current levels. Meanwhile, the consensus recommendation on the tech stock is Buy.
Susquehanna Financial Group is one of the more bullish outfits on Qualcomm stock with a Buy rating and $205 price target, representing implied upside of roughly 14% to current levels.
"Qualcomm has defined the cutting-edge cellular standard by consistently 'moving the goal posts' in baseband capabilities for the last two decades," Susquehanna analyst Christopher Rolland said in a May 2 report. “Every time a competitor matches Qualcomm's technology, they quickly add important new 'table-stakes' features. Additionally, the company's efforts around diversification are paying off as the company transcends handsets."
Related Content
-
In Family Philanthropy, Embracing Differences Can Pay OffDifferent approaches to charitable giving among generations and individuals can actually enhance the family's giving. Here's how.
-
Grow Your Investments Like Yale, Through a Self-Directed IRAYale's successful endowment focuses on alternatives. With a self-directed IRA, an individual investor could design a portfolio based on similar principles.
-
Five Things About Annuities That May Surprise YouThey're more varied, flexible and cost-effective than most people think, so don't let their complexity scare you off.
-
Why a 15-Year Mortgage Could Be the Key to a Larger Nest EggYour mortgage payments would be higher, yes, but you'd save quite a lot on interest and be mortgage-free 15 years sooner, freeing assets for other investments.
-
5 Stocks to Buy for a Trump PresidencyThe race for the White House is heating up and these five stocks are set to benefit if Donald Trump claims victory.
-
Six Target-Date Funds to Buy For Your RetirementThese six target-date funds are good set-it-and-forget-it options that are a staple of retirement plans.
-
How to Deal With Inflation: Advice From a Financial AdviserHigher prices are hitting everyone, but if you're especially hurting, here are some ways that could help you to cope.
-
Stock Market Today: Dow Dives 410 Points After August Jobs MissA big slump in tech stocks thanks to Broadcom's post-earnings slide put pressure on the main indexes too.
