As Qualcomm Inventory Raises Its Dividend, Is QCOM Inventory a Purchase?

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Dividend traders have had loads to cheer about up to now in 2026. Even because the broader S&P 500 ($SPX) has remained in detrimental territory to open the 12 months, dividend-focused funds just like the iShares Core Dividend Progress ETF (DGRO) have quietly completed higher than the market, returning greater than 2% year-to-date (YTD) in early March as traders shifted towards names with regular revenue.

In a market the place defending capital issues as a lot as chasing good points, corporations that hold lifting their payouts are making it clear how assured they’re.

Qualcomm (QCOM) is now the most recent chipmaker to hitch that group. On March 17, the San Diego-based semiconductor big’s board authorized a rise in its quarterly money dividend from $0.89 to $0.92 per share, a 3.4% increase, alongside a brand new $20 billion inventory repurchase authorization that sits on prime of an current $2.1 billion buyback plan.

That transfer got here after QCOM had already given up greater than 36% of its 52-week excessive worth, hit by a world reminiscence provide crunch that has slowed smartphone manufacturing and weighed on near-term earnings steering.

With QCOM buying and selling at a reduction and the corporate now stacking a dividend increase on prime of the biggest buyback authorization in its current historical past, is that this a worth investor’s dream setup, or does the inventory’s ache have extra room to run earlier than an actual backside varieties? Let’s discover out.

Qualcomm sits on the heart of cellular and related computing, designing chips and licensing key wi-fi patents that energy smartphones, automobiles, and a rising vary of good gadgets.

Over the previous 52 weeks, that story has not impressed the market, with QCOM shares down about 17%, and YTD they’re off one other 23%.

That slide has left the inventory wanting comparatively low-cost. Qualcomm trades at about 15.44x ahead earnings, under the sector common of 21.59x, which suggests traders are paying a decrease a number of for a similar $1 of anticipated revenue.

The dividend, nonetheless, seems like a transparent assertion. Qualcomm yields about 3.56%, with the newest quarterly dividend at $0.89 per share, a ahead payout ratio close to 35%, and a 23-year streak of annual will increase that places it properly forward of the tech sector’s common yield close to 1.4%. Administration isn’t just returning money to shareholders; it’s doing so from a strong monetary base.

In This fall CY2025, Qualcomm generated $12.25 billion in income, up 5% year-on-year (YoY) and barely forward of estimates, with adjusted EPS of $3.50, beating expectations by about 3%. Adjusted working revenue was $4.41 billion for a 36% margin, once more a bit above forecasts, and free money move margin held at a powerful 36%, displaying how a lot money the enterprise throws off to fund these dividends and buybacks.

Not each pattern is favorable, although: working margin slipped to 27.5% from 30.5% a 12 months earlier, and steering for Q1 CY2026 was cautious, with income round $10.6 billion and adjusted EPS at $2.55 on the midpoint, each under analyst expectations. Even so, stock days fell sharply from 145 to 109, pointing to a greater stability between provide and demand.

Qualcomm’s new full-stack robotics structure is constructed to run every part from family robots to full-size humanoids, bringing {hardware}, software program, and compound AI collectively in a single platform that may flip prototypes into actual machines within the discipline. The Qualcomm Dragonwing IQ10 Sequence is the core of this effort, a high-performance, vitality‑environment friendly robotics processor aimed toward industrial autonomous cellular robots and superior humanoids, appearing because the “mind of the robotic” and lengthening Qualcomm’s edge‑AI roadmap instantly into large-scale robotics.

On the info heart aspect, the early completion of the Alphawave Semi acquisition is supposed to hurry up Qualcomm’s transfer past consumer and edge gadgets into high-speed connectivity and compute inside the info heart. Alphawave’s IP and crew, now led inside Qualcomm by its co-founder and former CEO Tony Pialis, add high-speed SerDes and interconnect know-how that’s very important for AI‑heavy infrastructure.

In parallel, Qualcomm is utilizing Adobe (ADBE) GenStudio to rebuild its content material provide chain with generative AI, automating and scaling the creation, activation, and measurement of 1000’s of promoting property every week so its gross sales and advertising groups can higher assist and monetize these new AI and knowledge heart choices.

For the present quarter, March 2026, analysts anticipate earnings of $1.89 per share, down from $2.35 a 12 months in the past, which works out to a YoY drop of about 19.57%. The subsequent quarter, June 2026, is pegged at $1.83 per share versus $2.29 final 12 months, a 20.09% decline. For the complete fiscal 12 months ending September 2026, the Road is in search of EPS of $8.52 in contrast with $10.07 within the prior 12 months, a 15.39% slide, earlier than a small restoration to $8.72 in fiscal September 2027, simply 2.35% progress off that decrease base.

Financial institution of America lately reinstated protection with an “Underperform” ranking and a $145 value goal, pointing to the potential lack of Apple enterprise and rising competitors as key dangers that might maintain again lengthy‑time period progress.

Even so, the broader analyst group is extra optimistic. Throughout 32 analysts, the inventory has a consensus “Average Purchase” ranking, and the typical goal value of $161.32 implies roughly 23% upside from current ranges.

For traders weighing Qualcomm’s 3.4% dividend hike, the setup seems like a cautious “sure, however know what you’re shopping for.” The corporate is clearly leaning into shareholder returns with a richer payout and a large buyback whereas nonetheless throwing off sufficient money to fund severe bets on robotics, knowledge heart connectivity, and AI‑pushed advertising. All issues put collectively, QCOM most likely works greatest for dividend‑progress and worth‑oriented tech traders who can abdomen volatility and wait a few years for the expansion engines to totally present up within the numbers.

On the date of publication, Ebube Jones didn’t have (both instantly or not directly) positions in any of the securities talked about on this article. All data and knowledge on this article is solely for informational functions. This text was initially printed on Barchart.com

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