Friday, March 9, 2018

Qualcomm: 4% Dividend

Qualcomm (QCOM) increased the quarterly dividend by 9% to $0.62 per share. The annual dividend yield jumps to over 4% on this hike. More importantly, this sets the wireless tech giant up for a rally as the Broadcom (AVGO) buyout comes to a head.

The other good news is that the company is working with Huawei Tech to end the royalty dispute that along with Apple (AAPL) is crippling earnings. As part of the earnings guidance for 2019 of $6.75 to $7.50 per share, Huawei and Apple combine to cost Qualcomm $1.50 to $2.35 per share in earnings.

Closing the Huawei deal while singing a deal with Samsung recently would set the stock up for a rally without a deal from Broadcom that CFIUS is now holding up on national security concerns.

At a reasonable 15x 2019 EPS estimates places Qualcomm at a $100 price target. No matter which slate of board nominees get the final vote, the fiduciary responsibility is the shareholders of Qualcomm that aren't rewarded in a $79 offer from Broadcom.

Disclosure: Long QCOM. Please review the disclaimer page for more details. 

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