Some Reasons To Invest In Qualcomm Inc.

Some of the reasons that compel financial investors to invest in the telecommunication company, Qualcomm Inc.

QUALCOMM Inc. (NASDAQ:QCOM), a telecommunication company and one of the finest mobile-chip manufacturing organization, suffered from a tough year. Samsung, which is the one of its returning customer, dropped its contract for the Snapdragon chips and wireless modems from its flagship Galaxy S6 smartphones for the in-house components. It also faces rising rivalry from comparatively inexpensive competitors, such as RockChip and MediaTek, which introduce many below-average devices in the emanating market.

Those challenges tend Qualcomm to cut down the high-end of its financial for the current year turnovers reported at $1.5 billion during the past quarter. It is not surprising that the company’s stock has fallen by 20% from the starting of the year. Nevertheless, after that fall, the stock seems to have a strong long-lasting financial investment for some reasons.

The technology licensing organization business, which put forward CDMA technologies to handset vendors all over the world, entitles the company to cut wholesale price of the smartphone from 3% to 5%.

The unit reported 86% of pre-tax earnings of the telecommunication company regarding its last quarter against only achieving a third of its turnovers. The unit has also been progressing at a high rate as compared to the Qualcomm CDMA Technologies chip-making business. The QTL unit’s turnover and pre-tax incomes both showed an upward trend of around 7% yearly throughout the last quarter against the fall of 22% in the QCT unit and 74% dive in pre-tax incomes.

Throughout the last 12 months, the organization paid out around 65% of its cash flow as dividends, compared to Intel’s FCF payout ratio of 41%. This indicates that both the chipmaking businesses have the potential to raise their dividends in the stock market.

Qualcomm performance during the last 12 years showed an elevation with consistency, the association has improved its dividends per year with the average of 22% during the last 4 years. It currently put forward a yearly dividend income of 3.5%, at the same time INTC yielded 3.7%. Both yields are extremely higher against the average of S&P 500 yield of 2.15%.

Currently, the company plans to transform the prime cellphone market by spreading its roots into the market of Internet of Things (IoT). According to IDC, it is expected that the market, which depends on everyday gadgets linked to each other, will grow more than 7.1 trillion by 2020. Many tech giants are striving after the IoT to dominate the tech market and stay ahead of competition.