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
-
AI Tax Scams Target Middle and Older Adults: What to KnowScams Whether you’re a retiree or Gen Z, scammers can gouge big financial losses with the help of artificial intelligence.
-
IRA Conversion to Roth: Rules to Convert an IRA or 401(k) to a Roth IRAAn IRA conversion can give you a leg-up in retirement with tax-free income. But proceed with caution.
-
The Best REITs to BuyReal estate investment trusts, or REITs, are a special class of stocks that are known for their high dividend yields. Here's how to find the best ones to buy.
-
Stock Market Today: Stocks Enjoy a Fed Day Relief RallyThe question now is whether Jerome Powell and other policymakers can get the balance right given all the new noise.
-
The Free-Lunch Strategy to Reduce Risk From Tech StocksA recent rout in tech stocks has some investors thinking more defensively. This "free-lunch portfolio" strategy can help.
-
Stock Market Today: Stocks Skid Into Another Risk-Off TurnThe promise of the AI revolution can't overcome flickering hopes for a "Fed put."
-
How to Survive Market Mayhem2025 is turning out to be a turbulent year for the market, but don't panic. Here are four ways investors can ride out the storm.
-
Alternative Investments Under Trump: What You Need to KnowAs access to alternative markets opens up, retail investors looking to enhance their long-term financial outcomes have more opportunities to carefully consider.
-
Beware of TV/Billboard Personal Injury Law Firms: Here's WhyIf you or someone you know is tempted to hire a so-called settlement mill to handle a personal injury case, here are some reasons to reconsider.
-
How Small Businesses Can Clear the Economic Hurdles AheadShifting rules on taxes, trade and regulation are creating uncertainty for SMBs. Owners can overcome that by focusing on efficiency, flexibility and investment.
