A trio of semiconductor stocks — NVIDIA (NVDA), Qorvo (QRVO), and Skyworks (SWKS) — earn...
01/13/2014 8:00 am EST
Our favorite idea for speculative investors in 2014 is the world leader in 3G, 4G, and next-generation wireless technologies, explains Ingrid Hendershot, editor of Hendershot Investments.
Qualcomm (QCOM) reported record revenue for fiscal year 2013 of $24.9 billion, an increase of 30% over the prior year. Earnings for the 2013 fiscal year increased 12% year over year to $6.85 billion, or $3.91 per share.
Qualcomm's return on equity increased to 18.9% for fiscal 2013, with no long-term debt, and $29.4 billion in cash and marketable securities on the strong balance sheet, as of year end. Free cash flow of $7.7 billion increased 64% over the prior year.
Qualcomm returned $6.7 billion in capital to shareholders in fiscal 2013, by increasing its dividend for the eleventh straight year and repurchasing 71.7 million shares of stock for $4.6 billion. Qualcomm plans to repurchase another $4 billion of stock in fiscal 2014.
In the future, Qualcomm plans to return 75% of free cash flow to shareholders through opportunistic stock buybacks and increased dividends, which are expected to continue to grow faster than earnings.
The $1.40 annual dividend currently yields 1.9%. Management projects that revenue for fiscal 2014 will be in the range of $26.0 and $27.5 billion, representing 5%-11% growth. Earnings are forecasted in the range of $4.25-$4.45 per share for the 2014 fiscal year, representing growth of 9% to 14%.
Qualcomm believes the company can generate double-digit compound average growth for revenues and earnings for, at least, the next five years.
Related Articles on TECHNOLOGY
In the quest for ever-faster data transmission and storage, many companies are working to developer ...
Richard Moroney focuses on small to mid cap stocks in his specialized advisory service, Upside. Here...
While acknowledging the risks, we think the case for long-term growth in developing Asia is so compe...