QUALCOMM (QCOM) vs. Its Competitors Critical Comparison

QUALCOMM (NASDAQ: QCOM) is one of 67 publicly-traded companies in the “Communications & Networking” industry, but how does it weigh in compared to its peers? We will compare QUALCOMM to related companies based on the strength of its institutional ownership, valuation, earnings, analyst recommendations, dividends, risk and profitability.

Institutional and Insider Ownership

77.0% of QUALCOMM shares are owned by institutional investors. Comparatively, 64.0% of shares of all “Communications & Networking” companies are owned by institutional investors. 0.2% of QUALCOMM shares are owned by company insiders. Comparatively, 12.5% of shares of all “Communications & Networking” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares QUALCOMM and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
QUALCOMM 17.26% 19.64% 10.95%
QUALCOMM Competitors -1.68% -6.44% 0.52%

Dividends

QUALCOMM pays an annual dividend of $2.28 per share and has a dividend yield of 4.5%. QUALCOMM pays out 87.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Communications & Networking” companies pay a dividend yield of 2.1% and pay out 40.9% of their earnings in the form of a dividend. QUALCOMM has raised its dividend for 6 consecutive years.

Earnings & Valuation

This table compares QUALCOMM and its peers revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
QUALCOMM $22.57 billion $7.15 billion 19.50
QUALCOMM Competitors $2.86 billion $628.08 million 26.23

QUALCOMM has higher revenue and earnings than its peers. QUALCOMM is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility & Risk

QUALCOMM has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, QUALCOMM’s peers have a beta of 1.17, indicating that their average stock price is 17% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for QUALCOMM and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QUALCOMM 1 17 10 0 2.32
QUALCOMM Competitors 472 2682 4034 193 2.53

QUALCOMM presently has a consensus price target of $64.27, suggesting a potential upside of 26.27%. As a group, “Communications & Networking” companies have a potential upside of 27.52%. Given QUALCOMM’s peers stronger consensus rating and higher possible upside, analysts clearly believe QUALCOMM has less favorable growth aspects than its peers.

Summary

QUALCOMM beats its peers on 8 of the 15 factors compared.

About QUALCOMM

QUALCOMM Incorporated is engaged in the development and commercialization of a digital communication technology called code division multiple access (CDMA). The Company is engaged in the development and commercialization of the orthogonal frequency division multiple access (OFDMA) family of technologies, including long-term evolution (LTE), which is an Orthogonal Frequency Division Multiplexing (OFDM)-based standard that uses OFDMA and single-carrier Frequency Division Multiple Access (FDMA), for cellular wireless communication applications. The Company’s segments include QCT (Qualcomm CDMA Technologies), QTL (Qualcomm Technology Licensing) and QSI (Qualcomm Strategic Initiatives). The Company also develops and commercializes a range of other technologies used in handsets and tablets that contribute to end user demand. The Company’s products principally consist of integrated circuits (chips or chipsets) and system software used in mobile devices and in wireless networks.

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