QualComm Hits it out of the Park

One of our Dividend Geek best dividend growth stocks in the technology sector Qualcomm (QCOM) announced the following today:

– A 20% increase in the Company’s quarterly cash dividend
– A $5.0 billion increase in its stock repurchase authorization.

The cash dividend will increase from $0.35 to $0.42 per share of common stock and will be effective for quarterly dividends payable after March 26, 2014.  This dividend increase will raise the annualized dividend payout to $1.68 per share of common stock.  The $5.0 billion increase in the stock repurchase program brings the current authorization to $7.8 billion.  Prior to this increase, $2.8 billion remained available under the stock repurchase program.  To date in fiscal 2014, the Company has repurchased 27.6 million shares of common stock for $2.0 billion.

“Consistent with our commitment of returning capital to our stockholders, we are pleased to increase our quarterly cash dividend and stock repurchase authorization,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm Incorporated. “Our business continues to generate strong operating cash flows driven by the global adoption of our advanced technologies, including 3G and 4G, enabling us to continue to invest in our strategic growth opportunities, while also returning capital to stockholders.  Since these programs began in 2003, we have returned more than $28 billion to stockholders through a combination of stock repurchases and cash dividends.” (Source: Qualcomm press release)

Excellent pay raise! (ding, ding, ding, ding…) Congratulations to current Qualcomm shareholders! That’s the good news. However, for us investors that follow value investing principles and don’t currently own QCOM, but would like to – now is not exactly the best time to buy as the stock is trading 1.5% above fair value (based on Morningstar’s $75 fair value estimate) and is currently at it’s 52 week high. Personally I might consider a partial entry position around $70 per share, which would be a 7% discount to fair value. True 7% is not an ideal margin of safety, but it might be all that the market gives us for such a strong company.

For more information I found an excellent article entitled Qualcomm’s 2014 Dividend Increase by Tradevestor, which details Qualcomm dividend history and future growth opportunities.

In other news… I updated the Dividend Geek portfolio (membership required) after receiving a dividend payment from Aflac (AFL) yesterday. I’m looking forward to March as 7 of the 16 companies in the current Dividend Geek portfolio pay dividends this month.

Also, I’m working on a multi-part blog post series on Financial Independence! Say tuned I hope to publish part one within a week.

All the best!

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