We not too long ago printed an inventory of the 13 Best Technology Dividend Stocks to Invest in. On this article, we’re going to check out the place QUALCOMM Included (NASDAQ:QCOM) stands towards different finest know-how dividend shares.
There was a time when tech shares drew investor curiosity purely for his or her development potential. However extra not too long ago, they’ve been gaining consideration for a special purpose: dividends. This marks a serious shift, provided that tech corporations have historically centered their assets on innovation and enlargement. At this time, a good portion of the tech sector consists of established corporations with stable enterprise fashions, wholesome margins, regular development, sturdy financials, and manageable debt ranges. In response to S&P, about 39% of tech corporations within the Composite 1500 index at the moment are returning capital to shareholders by dividends—a notable leap from 28% again in 2013.
As well as, know-how shares have emerged as a serious contributor to the market’s total dividend payouts. FactSet information confirmed that tech corporations now account for round 13% of the entire greenback worth of dividends inside the S&P Composite Index. That places the tech sector simply behind financials, making it the second-largest supply of dividends within the index—with a robust probability of taking the highest spot within the close to future.
What’s extra shocking is that tech corporations haven’t simply begun distributing dividends—they’ve additionally seen a choose group constantly increase their payouts 12 months after 12 months. This group contains among the world’s most distinguished and profitable names, alongside main world consulting corporations, bank card suppliers, and different tech-adjacent gamers. Over the previous a number of years, dividend development from the know-how sector has outpaced that of the broader market. Knowledge from S&P Dow Jones Indices confirmed that tech corporations inside the S&P Composite greater than doubled their whole dividend payouts by 2023 in comparison with 2013. This development ranks because the fourth highest amongst all sectors and considerably surpasses the Index’s total dividend enhance of seven.2% throughout the identical timeframe. With tech’s present dividend payout ratio at simply 39%, there seems to be appreciable room for additional enlargement.
The transfer by main tech corporations to start out paying dividends has sparked discussions round discovering the fitting steadiness between capital appreciation and revenue technology. Sam Witherow, who manages the JPM World Fairness Earnings fund, famous that though his fund has historically included a mixture of dividend-paying corporations and people centered on capital development, the traits of a few of these corporations at the moment are evolving. He made the next remark about these methods:
“We’re in search of to supply purchasers with each a yield premium to the market and a dividend development premium to the market on the combination portfolio degree. It’s the mixture of the 2 traits that usually results in the very best risk-adjusted returns. To ship this we’ve got all the time appeared to have diversified publicity throughout world industries together with historically growthier industries like shopper discretionary or tech.”
Sam Buckingham, an funding supervisor at Abrdn Portfolio Options, identified that development shares providing smaller dividends may very well be helpful for revenue funds aiming to diversify throughout totally different sectors and funding components. He defined that whereas these shares usually begin with decrease yields, they usually have the potential for dividend development over time. When paired with extra conventional revenue shares—like these within the utilities sector that provide larger preliminary payouts however slower development—they may help create a extra balanced portfolio. Given this, we are going to check out among the finest dividend shares within the tech sector.
Is QUALCOMM Included (QCOM) the Greatest Expertise Dividend Inventory to Spend money on?
A technician testing the newest 5G gadget, demonstrating the corporate’s dedication to innovation.
For this checklist, we scanned the holdings of the S&P Data Expertise index, which tracks the efficiency of main tech corporations. From there, we recognized corporations that pay dividends to shareholders and picked 13 corporations with the very best variety of hedge fund traders, as per Insider Monkey’s This fall 2024 database. The shares are ranked in accordance with the variety of hedge funds having stakes in them.
Why are we within the shares that hedge funds pile into? The reason being easy: our analysis has proven that we will outperform the market by imitating the highest inventory picks of the very best hedge funds. Our quarterly e-newsletter’s technique selects 14 small-cap and large-cap shares each quarter and has returned 373.4% since Could 2014, beating its benchmark by 218 proportion factors (see more details here).
Variety of Hedge Fund Holders: 79
QUALCOMM Included (NASDAQ:QCOM) is a California-based multinational semiconductor manufacturing firm that focuses on wi-fi telecommunications know-how. The corporate is well-positioned to capitalize on the rise of AI and the rising demand for edge computing. Its alliances with main gamers like Samsung and Google have strengthened its presence throughout cellular and PC platforms.
Within the first quarter of fiscal 12 months 2025, QUALCOMM Included (NASDAQ:QCOM) delivered spectacular outcomes, posting $11.7 billion in income—up 17.6% from the identical interval the 12 months earlier than. This marked the third straight quarter of double-digit income development and set a brand new quarterly document for the corporate. The chip phase (QCT) was a serious contributor, bringing in $10.1 billion in income, a 20% enhance year-over-year. Inside this division, smartphone chip gross sales climbed 13% to $7.6 billion, automotive income soared 61% to $961 million, and the Web of Issues (IoT) phase expanded 36% to $1.5 billion.
QUALCOMM Included (NASDAQ:QCOM) additionally ended the quarter with a robust monetary place, holding over $3.1 billion in money and money equivalents. It generated almost $4.6 billion in working money circulation and returned $942 million to shareholders by dividends. The corporate has raised its payouts for 21 consecutive years, coming by as probably the greatest dividend shares on our checklist. With its quarterly dividend standing at $0.89 per share, QCOM provides a dividend yield of two.53%, as of April 10.
General, QCOM ranks seventh on our checklist of the very best dividend shares within the tech sector. Whereas we acknowledge the potential of QCOM as an funding, our conviction lies within the perception that some deeply undervalued dividend shares maintain larger promise for delivering larger returns, and doing so inside a shorter timeframe. In case you are searching for a deeply undervalued dividend inventory that’s extra promising than QCOM however that trades at 10 instances its earnings and grows its earnings at double digit charges yearly, try our report concerning the dirt cheap dividend stock.
