Despite the problems at both Cisco (CSCO) and Qualcomm (QCOM), I like both stocks and would feel comfortable owning both in a portfolio, observes dividend reinvestment specialist Chuck Carlson, editor of DRIP Investor.
If I was looking more short term, say over the next 6-12 months, I think Cisco has an edge here. The stock is showing better price action, and there are less uncertainties hanging over the stock that make it a safer choice for the next 12 months.
However, if I was willing to look more long term, Qualcomm offers the better value. The stock’s Quadrix Value score of 82 (out of a possible 100) beats the Value score of 68 for Cisco. Furthermore, Qualcomm has a slight edge in dividend yield (3.7% versus 3.4% for Cisco).
And I think Qualcomm ultimately has better long-term growth prospects once it can work out some of its current licensing and litigation issues. History has shown that Qualcomm is a much more volatile stock, however, so I think investors take on more risk buying Qualcomm than Cisco.
Still, given my usual long-term holding period for stocks, I would choose Qualcomm. Both Cisco and Qualcomm offer direct-purchase plans whereby any investor may buy the first share and every share directly from the company.
