QUALCOMM, Inc. (QCOM), Apple Inc. (AAPL), And The Intelligent Way To Play Mobile

The company may face some margin pressures as cheaper mobile devices gain market share in emerging markets; low-end chips are less profitable than high-end ones. That was probably the main driver of the post earnings sell-off that the stock suffered last week in spite of reporting better than expected sales for the last quarter and also raising its guidance.

On the other hand, QUALCOMM, Inc. (NASDAQ:QCOM) should benefit from the transition towards 4G/LTE. In the future, many smartphones and tablets will be compatible with 4 G/LTE and 3G at the same time, the transition process is still in its first stages on a global basis and products need to offer adaptability. This means that Qualcomm will continue making money from its 3G and its 4G/LTE patents for quite some time.

The company has delivered growing sales and earnings through the ups and downs of the business cycle, and it has a rock solid track record when it comes to regularly increasing dividends and implementing share buybacks.

Qualcomm gave a big boost to its capital distribution program back in March, when it a announced a 40% increase in dividend payments, bringing the annual dividend payout to $1.40 per share which means a dividend yield of around 2.3% at current prices.

The company also launched a new repurchase program, QUALCOMM, Inc. (NASDAQ:QCOM) can repurchase up to $5 billion in stock under the new program, this replaces the prior one that was for $4 billion and had $2.5 billion of repurchasing authorization remaining.

The mobile revolution has plenty of room for growth considering the opportunities in emerging markets and in product categories like tablets. Because of its superior technology, rock solid competitive position and outstanding financial performance, Qualcomm is a smart bet on the mobile computing boom.

The article The Smart Way To Bet on Mobile originally appeared on Fool.com and is written by Andrés Cardenal.

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