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By and large, Wednesday was an awful day for the stock market. One notable exception was mobile device components specialist Qualcomm (QCOM 1.46%), whose shares enjoyed a 1.5% rise while the S&P 500 index declined by roughly that amount. This, despite a negative move from an analyst regarding the company. What seemed to make up for this was the company’s latest dividend declaration.
That day, Citigroup‘s Christopher Danely placed Qualcomm and its chipmaking cousin Intel on his bank’s negative catalyst watch list. In doing so, he reiterated his neutral ratings on both, and his $105 per share price target on Qualcomm.
Investors shrugged off this development, not least because they’re about to get a bit more money in their pockets from their company.
Wednesday morning, Qualcomm declared its latest quarterly dividend. This is to be $0.75 per share, matching the three previous payouts, and yielding nearly 2.5% — comparatively high for the typically ungenerous tech sector. This dividend is slated to be handed out on March 23 to investors of record as of March 2.
For many, Qualcomm is most closely identified as an important supplier to Apple, for which it provides the modem chips that allow for voice communication with the latter company’s iDevices.
One big concern is Apple’s ongoing efforts to bring the production of certain key components in-house, thus reducing dependence on third parties like Qualcomm. But this looming challenge has been anticipated by management for years, and the company still has a window of time to adjust its operations accordingly.
Citigroup is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
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