Qualcomm’s Dividend Strength Is Undeniable

Image: Qualcomm remains a tremendous free cash flow generator.

By Brian Nelson, CFA

Back on May 1, Qualcomm reported solid second quarter results for fiscal 2024, for the period ending March 24, 2024. Revenue edged up 1% higher, while earnings before taxes on a non-GAAP basis increased 11% year-over-year. Non-GAAP net income jumped 14% from last year’s quarter, while non-GAAP diluted earnings per share advanced 13%. Though its top line performance was rather modest, we liked how the firm was able to leverage that growth into strong earnings momentum.

Management was upbeat on its quarter and outlook:

We are pleased to report strong quarterly results, with EPS exceeding the high end of our guidance. We are excited about our continued growth and diversification, including achieving our third consecutive quarter of record QCT Automotive revenues, upcoming launches with our Snapdragon X platforms, and enabling leading on-device AI capabilities across multiple product categories. 

Looking forward to the fiscal third quarter, management is targeting revenue in the range of $8.8-$9.6 billion, GAAP diluted earnings per share in the range of $1.74-$1.94 and non-GAAP diluted earnings per share in the range of $2.15-$2.35. For the six months ended March 24, Qualcomm hauled in ~$6.5 billion in operating cash flow and spent $398 million in capex, resulting in $6.1 billion in free cash flow, well ahead of the $1.79 billion it spent on dividends over the same time period. Qualcomm’s forward estimated dividend yield of ~1.9% is quite healthy.  

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