Qualcomm Stock Hands $42 Bil Back – Worth a Look

Qualcomm Stock Hands $42 Bil Back - Worth a Look?

In the last five years, Qualcomm (QCOM) stock has returned $42 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let's look at some numbers and compare how this payout power stacks up against the market's biggest capital-return machines.

As it turns out, QCOM stock has returned the 37th highest amount to shareholders in history.

Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management's confidence in the company's financial health and ability to generate sustainable cash flows. And there are more stocks like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.

Top 10 Stocks By Total Shareholder Return

For full ranking, visit Buybacks & Dividends Ranking

What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Stocks like Meta (META) and Microsoft (MSFT) are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.

That's the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let's look at some numbers for QCOM. (see Buy or Sell Qualcomm Stock for more details)

Qualcomm Fundamentals

• Revenue Growth: 10.3% LTM and 2.3% last 3-year average.
• Cash Generation: Nearly 28.8% free cash flow margin and 27.2% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for QCOM was -15.5%.
• Valuation: Qualcomm stock trades at a P/E multiple of 25.1

*LTM: Last Twelve Months

The table gives a good overview of what you get from QCOM stock, but what about the risk?

QCOM Historical Risk

QCOM isn't immune to big pullbacks. It plunged nearly 79% in the Dot-Com crash and dropped about 48% during the Global Financial Crisis. The 2018 correction and COVID sell-off each triggered declines of around 33-36%. Even the recent inflation shock caused a pullback close to 44%. Strong fundamentals don't eliminate risk-when the market turns, QCOM can feel the pain just like most stocks.

But the risk is not limited to major market crashes. Stocks fall even when markets are good - think events like earnings, business updates, and outlook changes. Read QCOM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 - the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.