Friday, 2 December 2016

52. Cash-or Trash #3, Qualcomm

Having a stack of dollars burning in my pocket usually makes me more nervous than having actually invested them. This time it’s nothing new, the search for new opportunities has begun!

A quick search for high dividend NASDAQ100 funds (other than the ones I currently own) brings me at Thestreet.com. A great site for new insights. The first name that appears in a top 11 list of relatively higher dividend paying shares is company Qualcomm.

Quick chart:

Source:
Date
2-12-2016
Ticker
NASDAQ:QCOM
Share price
$64,16
Dividend / yield
$0,53
Yield
3,3


Investment
$1.500,00
Distributions per year
4
Amount of shares
23
Dividends per distribution
$12,19
Dividends per year
$48,76

The yield is far from where I was interested in years ago. One thing that I have learned over time is that with bigger dividends actually the risks also increase. Time to get some securities, back to the case:. Pros and cons set out against each other:
+
Qualcomm is known for its increase of dividends (counting from 2003);
Because smartphones demand is still growing, the company expects the earnings per share to rise 15% a year;
TheStreet calls this share undervalued, anticipating a 20% return of market capital within the next few years.
Due to the upcoming cons, the share price has taken a hit (falling from 68 back to 64 USD). Reason to make this an investment opportunity.
Also, the company is planning to take over the Dutch NXP semiconductors
-
Samsung sales falling, where these smartphone sales make a good portion of Qualcomm revenue;
Patent claims in China, resulting in a 975Million USD fine by the Chinese government.

=

Positive feelings after this. However, There might just be one out there with a higher yield. Should this share price go under 64 I’ll take a few. If not: I keep the money in my pocket.

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