Investors looking for the best options to diversify long-term investment portfolios have a lot to consider when selecting stocks for inclusion. Investors are eyeing Qualcomm as a potential inclusion, but some wonder if it's a solid choice for long-term investment. Any investment is a calculated risk, but our initial assessment leans toward its stability and the likelihood that the stock will continue to perform in alignment with profitable investment prospects for investors. Projections can be off despite analysis of the history, company profile, previous performance on the market, and expert analyst opinion. It's how we assess the potential of investment stocks and it's a method that surpasses gut feelings and hunches. We look at Qualcomm with a careful inspection of these factors to provide you with the information necessary to make an informed choice with the pros and cons of investing in the stock.
Qualcomm company profile
Crunchbase provides an overview of Qualcomm as an American company based in San Diego, California. The founders of the company are Irwin M. Jacobs, Andrew Viterbi, Harvey White, Franklin Antonio, Kelin Gilhousen, Andrew Cohen, and Adelia Coffman. The company launched its operations on January 1, 1985. It's been in business for 37 years and has been around long enough to see patterns in its performance.
Qualcomm specializes in the production of fabless semiconductors. It designs, manufactures, and markets products and services for the digital wireless telecommunications industry. Qualcomm's products provide connectivity and processors in software, displays, and charging products as solutions for assorted industries. The reach of industry penetration is strong, extending into the Internet of Everything, networking, wearables, smart homes, smart cities, healthcare, education, mobile computing, and the automotive industries.
International market penetration
Qualcomm's products and services extend into most regions of the world with an international network thriving and growing. The telecommunications giant maintains offices in the United States and Canada serving North America. The United Kingdom, Ireland, France, Belgium, Netherlands, Austria, Germany, Finland, Spain, Italy, and Sweden are on the European front. Qualcomm also has a presence in Australia, Mexico, Brazil, Israel, Saudi Arabia, Russia, Turkey, The United Arab Emirates, Saudi Arabia, Turkey, Taiwan, Thailand, Vietnam, South Korea, Singapore, Japan, The Philippines, Nigeria, South Africa, Hong Kong, India, and Indonesia.
Some of the products of Qualcomm include Snapdragon, VIVE, Wi-Fi platforms, Powerline, IZat, IPQ, Hy-Fi, Gobi, Small Cells, Mirasol, Snaptrack, WiPower, Vuforia, Halo, RaptorQ, QLearn, QChat, Healthy Circles, 2net, Brew, AllPlay, and Pixtronix. Qualcomm owns and distributes a broad array of popular and widely used products and services that generate continuous streams of revenue.
Qualcomm has acquired 53 companies that operate as subsidiaries under the parent company. The businesses acquired expanded the product and service lines and the reach of Qualcomm into new territories for geographical reach and add new services for its customers. Some of its subsidiaries include Qualcomm Atheros Wilocity, Ubicom, SnapTrack, Qualcomm Ventures, its Investment Arm, Qualcomm InnovationCenter, CSR, Airgo Networks, and dozens more. The most recent acquisition was a company called Arriver, brought into the fold on April 4, 2022.
Qualcomm investments and IPO
Qualcomm has extensive investments throughout the world. The company made a total of 88 investments with 26 exits including exits from 99, Sense Time, and One Web. They've made three diversity investments. Most recently, it invested in uMobile on March 4, 2022. Qualcomm went public on December 20, 1991 opening stock at $16 per share. It's registered under the Nasdaq ticker symbol QCOM. Qualcomm raised capital across three funds including their most recent Snapdragon Metaverse Fund, announced on March 21, 2022, raising $400 million.
Qualcomm ranking against the competition
Comparably stacks Qualcomm up against its closest competitors in the industry to see how it measures up. Polls and fact-finding investigation compare Qualcomm across pricing, product quality, CEO score, customer service, net promoter, Overall culture, and employee net promoter scores. for pricing and product quality it comes in 4th with Ericcson taking the lead in both. Its CEO score is a solid 4th with Apple's CEO taking the lead. Customer service from Qualcomm gets a score of 4 out of 5, coming in below Ericcson. It's fifth in its net promoter scores, falling again, below Ericcson. It ranks sixth in employee net promoter scores and fifth in overall culture scores as rated by employees. Qualcomm hasn't achieved the number one position in any of these categories suggesting that the competition is taking the lead in multiple areas affecting consumer confidence, but Qualcomm does have its share of fans and loyal consumers.
Stock analyst forecasts and opinions of Qualcomm
Experts in stock performance forecasting have mixed opinions of Qualcomm as a solid long-term investment option. It's a positive conundrum for investors as it provides multiple viewpoints for consideration. Yahoo Finance picked up on Zack's current opinion of Qualcommshowed a 5.67% loss over the past 30 days as of March 25, 2022. It lagged in the computer and tech sector of the market with others performing at an overall 4.34% to the plus. The expectation is for net sales to increase by 33.46% from the previous year with net sales of $10.59 billion. The outlook is good for earnings with a forecast for $11.76% earnings per share and revenue of $42,39 billion They ascribe the ups and downs to short-term business trends. They estimate positive revisions for Qualcomm's business outlook, citing an annual return average of +25% from 1988 to current. They currently rate Qualcomm as a number 2 on their scale which is a strong suggestion to buy. Qualcomm is currently trading at a discount.
More reasons to buy Qualcomm than sell
We turn to the expert opinions of the Motley Fool to understand more about the current forecasts for Qualcomm as of April 4, 2022. The Fool's analysts explore the past performance of Qualcomm stock and note that over the past five years, the stock has generated a 200% return for investors opting for reinvestment of dividends with a 160% rise in stock. It surpassed the S&P 500 with a total return of 110% by comparison. Considering its massive network of products and services, and its status as a leader in the production of application processors, mobile device modems, and wireless patents, it gets a percentage of most smartphones sold throughout the world. They point out that Qualcomm's market share in the mobile chip industry is growing through the global shortage. The growth generated is strong with healthy returns of free cash flow to investors. They're accomplishing the latter through dividends and buybacks. they also point out that stock is cheap now, but the discount is reflective of possible declines in the sale of smartphones.
They list four reasons to invest in Qualcomm as a long-term investment. These include market share gains, Qualcomm's ability to weather the ongoing global chip shortage over other chipmakers, the company's stable growth rates, and the friendly measures Qualcomm adopted for its shareholders. Previous performance shows a 74% return of Qualcomm's free cash flow to its investors in the amounts of $3.4 billion in buybacks and $3 billion in dividends. The EPS doubled the year over with expectations for earnings growth of 39% for 2022. It's set a solid track record for paying almost two decades of continuous dividends retiring a third of its shares in the recent decade. The single reason for a sell recommendation is Qualcomm's low valuation with a 1.9% dividend yield which is lower when compared to the 2.5% of IT and 3% of Intel. Despite this, Qualcomm's total return generation has exceeded both of these competitors in the previous five-year period.
The verdict on Qualcomm stock as a solid long-term investment
Qualcomm stock is forecast for revenue and earnings growth of 7-8 percent in the upcoming twelve months. External factors and market trends could exacerbate a slowdown in smartphone sales until the 2023 upgrade cycle regenerates a solid pattern of sales. Investor concerns revolving around the trends could impact stock performance, but that's a part of the investment game. Predictions of slowdowns in consumer purchases are forecast across the market and the reduction could impact Qualcomm stocks in the interim. Concerns may periodically create dips in stock performance. Conversely, the recoveries that follow are consistent.
The expectation is for Qualcomm to continue its progressive pattern based on its history and market forecasts. Qualcomm has taken steps to diversify its portfolio with wise investments in the manufacture of new chips for the Internet of Things devices, PCs, servers, and connected cars. Their venture into smart homes, education, the automotive industry, and other ventures, has spread its investment risks in a well-balanced portfolio of 88 investments with few exits. The Fool gives us five reasons supporting Qualcomm as a stock worth considering as a long-term investment option. They point out that the strengths of the company outweigh its weaknesses. Zack's gives it a rating of 2. The rating is a moderate recommendation to buy, with fewer reasons not to buy than to move ahead with an investment.
We consider the positives and negatives of investing in Qualcomm stock as a long-term investment option. Some critical factors in the decision-making process are its stability and historical performance, posturing in the market, penetration, product sales, consumer perceptions, historical market performance, and forecast trends. Qualcomm is an established enterprise in the telecommunications industry with feeders that branch out into multiple industries and sub-industries with investments that diversify its portfolio. When one stock slips in performance, there are others to compensate, adding to its overall stability. The profitability of Qualcomm remained consistent throughout the years. The stock has seen occasional dips related to investor perception and consumer behaviors. The perception of Qualcomm from the consumer base is high, although not at the top of the list. Its loyal base of repeat customers is evident in the massive sales volume in multiple countries.
It is projected to increase after a predicted slowdown in buying. Investor behavior is the most elusive factor to predict. Investors may become fickle when faced with downward trends. Overall, seasoned long-term investors understand the nature of the stock market and generally let it ride. More inexperienced investors may panic and shift priorities. It's impossible to predict the ratios of holds, sells, buys, and other behaviors. From all indications, there are more reasons to choose Qualcomm as a long-term investment option than not. It's a solid company with a healthy outlook for continued growth and expansion. Its massive networks of products and services are available and utilized throughout many countries. Stock performance has a history of regular dividends paid to investors for nearly two decades.
Is Qualcomm Stock a Solid Long-Term Investment?
Any investment in the stock market is taking a calculated risk. Our goal is to provide you with information to help you to determine if Qualcomm stock is a viable option for inclusion in your long-term investment portfolio. Analysts expect an occasional slowdown in smartphone sales with rebounds as new models are released. Per historical trends, consumers will upgrade their current models. It's nothing new, but some investors may bolt at the notion of decreased revenues. It's worth noting that Qualcomm's revenues likely will remain solid, and healthy returns on investments are likely to continue for investors. The current wisdom and meeting of the minds place Qualcomm as a strong buy with prices at a reasonable level and expectations for them to rise in value. When compared with competing stocks in the same industry, Qualcomm has a few shortfalls, but it makes up for these in other areas where it excels over the competition. Our analysis is a recommendation of consideration of Qualcomm for long-term investors, but it's wise to consult with your financial advisor before committing to an investment.
Written by Allen Lee
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