Qualcomm Bumps Up Quarterly Dividend By 5%; Street Sees 34% Upside

Qualcomm Incorporated increased its quarterly cash dividend by 5% to $0.68 per share. Shares of the chip maker declined almost 1% to close at $127.87 on March 10.

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Qualcomm (QCOM) announced that the new quarterly dividend will be effective for payment after March 25, 2021. The company has rewarded shareholders with consecutive annual dividend increases since 2005.

The company’s annual dividend of $2.72 per share now reflects a dividend yield of 2.13%.

Qualcomm CEO Steve Mollenkopf said, “We are pleased to announce an increase in our quarterly dividend, reflecting our strong financial performance and continued commitment to returning capital to stockholders.” (See Qualcomm stock analysis on TipRanks)

Last month, the company reported fiscal 1Q adjusted earnings of $2.17 per share, which came in ahead of analysts’ expectations of $2.08. Adjusted revenues were $8.23 billion, up 63% year-on-year but lagged consensus estimates of $8.24 billion. For fiscal 2Q, the company projects adjusted EPS to be in the range of $1.55 to $1.75, versus analysts’ expectations of $1.57. Revenue is expected to land between $7.2 billion and $8 billion, versus the consensus estimate of $7.1 billion.

On March 4, JPMorgan analyst Samik Chatterjee trimmed the stock’s price target to $170 from $185 and reiterated a Buy rating.

The analyst “reduced estimates to reflect component shortages and weaker sell-through indications.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 13 analysts suggesting a Buy and 8 analysts recommending a Hold. The average analyst price target of $171 implies 33.7% upside potential to current levels. Shares have jumped 71.4% over the past year.

Qualcomm scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.