Qualcomm Hikes Dividend Ahead of Q2 Earnings

It’s that time of the year, and Qualcomm Inc. (NASDAQ: QCOM) is raising its dividend in an effort to return more capital to shareholders. The company announced that the board of directors has approved a 10% increase in the quarterly cash dividend.

The quarterly cash dividend will increase from $0.48 to $0.53 per share of common stock and will be effective for quarterly dividends payable after March 23, 2016. This dividend increase will raise the annualized dividend payout to $2.12 per share of common stock.

At the current price level, this would bring the total dividend yield to nearly 4% on an annualized basis. The dividend payout ratio would also be in the area of 52%, compared to current EPS estimates for the fiscal 2016 year.

At this time last year, the company hiked its dividend by 14%, but this would only put the annual yield at 2.6%.
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Steve Mollenkopf, CEO of Qualcomm, commented:

Over the last several years, we have invested aggressively in our technology roadmap and returned substantial capital to stockholders as part of a balanced capital allocation strategy. The dividend increase announced today reflects both the strength of our ongoing cash flows, as well as our confidence that our investments have created a strong foundation for future earnings growth.

So far in 2016, Qualcomm has outperformed the broad markets, with the stock up 7.6%. Over the past 52 weeks, the stock is actually down about 23%.

Shares of Qualcomm closed Monday up 1.2% at $53.30, with a consensus analyst price target of $57.55 and a 52-week trading range of $42.24 to $74.09.