While the entire stock markets are plummeting, Qualcomm QCOM seems to be one stock that is expected to not be dreadfully harmed by a declining hit in light of coronavirus fears and tumbling markets. While other speculations surround the promising stock, it seems that they factored in the 5G smartphone sales growth rather nicely. Chances are that even though most if not all stocks have taken a huge hit, this stock will recover nicely with some healthy gains.
As most if not all other stocks, the semiconductor sector is being hit hard. This was actually of no surprise since this type of industry is usually the first to drop quickly. However, Qualcomm has not shown any significant drop more or less than any other semiconductor stock currently.
So far, the Qualcomm stock has taken some hits like others and will most likely tumble even more before making its way back up. As an investor, it’s important that you look at the larger picture to get a better understanding of when to buy and when to sell or when to remain patient and hold out with the hope and confidence of the stock eventually showing gains. The stock may plummet further before beginning to climb, but if you are patient, this may be a good investment over the long haul.
Qualcomm is a dividend-paying stock, with a most recent steady history of yielding 4.3%. It also returned about 2.1% of its market capitalization to shareholders with stock buybacks over the last year. While companies typically pay dividends out of their earnings, if the company pays more than it earns, the dividend may be cut. Over time, QUALCOMM has paid out 70% of its profit in the form of dividends.
High dividends and technology stocks usually do not go hand-in-hand. Tech companies are well known for their growth focus. They tend to pour cash into research and development to grow their business. However, a few of these tech stocks are known for paying dividends making them stand out. Qualcomm is a mobile chip maker with a promise of 5G in the future. The COVID-19 pandemic has so far been devastating to the global economy that impacts the smartphone market in a negative manner. Despite this, Qualcomm was still able to raise its dividend throughout most of the quarantine fears. As early as February, the company was still able to increase its quarterly payout by 5%.
When the market stabilizes, as it is projected to do once the coronavirus is contained or treatment is discovered and quarantines are lifted, there will still be a demand and need for the 5G that Qualcomm offers. There will still be a demand, perhaps even a greater one, for all of the products that use 5G.