New Highs for Qualcomm Sure Feel Different 14 Years Later

Qualcomm Inc. (NASDAQ: QCOM) hit what seemed like new all-time highs on Thursday. The problem is that this has to be compared to the tech bubble days of 1999 to 2000, when valuations were through the roof on anything in technology. You also have to consider stock splits and dividend payments, and then you are still shy of absolute adjusted highs. Also, back then Qualcomm traded at nose-bleed valuations. Today’s valuation is at less than 16 times expected 2014 earnings.

One driving force for Qualcomm on Thursday is that the mobile chip-maker’s stock was reiterated as Buy and the price target was raised to $90 from $86 by Canaccord Genuity. The firm was talking up Qualcomm as being well positioned to benefit from China’s LTE build-out, as well as upcoming higher end Android refresh and the coming iPhone 6 upgrade cycle.

On the corporate governance side of the equation, Qualcomm has raised its dividend and keeps buying back stock. Its yield is 1.7% for the common stock dividend. That may not sound too impressive on the surface, but much of that low yield is because Qualcomm’s stock price rallied $10 in the past 60 days or so.

Thursday’s price gain was as high as $81.30, but in early afternoon trading the stock was up 0.6% at $80.64.

Qualcomm’s consensus analyst target from Thomson Reuters is $82.17. The mean target is slightly higher at $84.00, but the highest analyst target for the stock is still all the way up at $100.

It is fair to say that Qualcomm is trading at new highs if you consider the splits and the dividends that long-term charts may at least partially discount. That being said, Qualcomm’s market cap is now $136 billion, and it is not trading at nosebleed valuations compared to the past.