Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

When Tech Giants Intel Corporation (INTC) And QUALCOMM, Inc. (QCOM) Lock Their Horns

This time it’s the fight for Dividend Investors and the contenders are Intel Corporation (NASDAQ:INTC) and QUALCOMM, Inc. (NASDAQ:QCOM) and with a heavy heart Intel will have to pass the flaming torch to the new kid on the tech block. In a Motley Fool article both companies were analysed on the basis of their dividend prospects and it is needless of to say which one of them came out as a shining star.


There are two lines of comparisons that we will be carrying out here. First, the dividend growth and secondly, a measure of dividend stability based on free cash flow of the two companies.

The dividend yield on both stocks is fairly close. The article reported it to be 2.3% for QUALCOMM, Inc. (NASDAQ:QCOM) and 2.6% for Intel Corporation (NASDAQ:INTC) based on recent prices. However, Intel’s slow growth has limited its five year compound dividend growth rate to 10% while there was little that held QUALCOMM, Inc. (NASDAQ:QCOM) back from posting a 20% dividend growth based on annual compounding for the last five years.

As far as free cash flow is concerned, Intel Corporation (NASDAQ:INTC) generated $3.4 billion in the first two quarters of 2014 and dividend payments amounted to $2.2 billion. This means that dividend payments constituted about 65% of the free cash flow.

 Now compare this with QUALCOMM, Inc. (NASDAQ:QCOM)’s free cash flow payout ratio of a meagre 28% and remember that it is providing almost the same dividend yield as Intel Corporation (NASDAQ:INTC). The relevant free cashflow and total dividend  payment figures for Qualcomm are $6.3 billion and $1.8 billion respectively for the last three quarters, according to the Motley Fool article.

This shows that there is plenty of room left in QUALCOMM, Inc. (NASDAQ:QCOM)’s free cash flow for the company to keep on increasing their dividends in future to keep up with the 20% dividend growth figure quoted above. The same cannot be unfortunately said for Intel Corporation (NASDAQ:INTC) who already has a lower dividend growth rate which forms a higher percentage of its free cash flow.

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.