Qualcomm Inc. (QCOM) has decided to raise its quarterly cash dividend by 12% and also increase the size of the ongoing share buy-back program. The Board of Directors of Qualcomm has approved the increase of quarterly cash dividend from 17 cents to 19 cents per share of common stock and will be effective for quarterly dividends payable after March 28, 2010. This dividend increase will raise the annualized dividend payout to 76 cents per share of common stock.
The Board of Directors also approved a new $3 billion share repurchase program to replace the existing $2 billion share repurchase program out of which $1.7 billion of buy-back activity has already been completed. The company had approximately 1.64 billion shares of common stock outstanding as of Feb 26, 2010.
Qualcomm maintains a strong balance sheet with nearly $19 billion ($11.2 per share) of cash & marketable securities and no outstanding debt. The company continues to generate positive free cash on a sequential basis. According to our assessment, in 2010, Qualcomm may become the first CDMA chipset developer with the ability to support all existing software platforms for smartphone.
Robust growth of 3G networks and a solid net cash position serve as long-term catalysts for Qualcomm. As of now approximately 85% of total wireless operators throughout the world have upgraded to 3G networks. At the end of 2009, there were about 945 million 3G subscribers worldwide, up 30% year over year.
Various industry sources predicted that smartphone shipments as a percentage of total mobile handset shipment are expected to increase from 20% in 2009 to nearly 40% by 2014. All these development will help Qualcomm to maintain its top-line growth.
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