Comparing QUALCOMM (QCOM) and Its Rivals

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

Risk & Volatility

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

Valuation & Earnings

This table compares QUALCOMM and its peers gross revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
QUALCOMM $22.57 billion $7.15 billion 20.00
QUALCOMM Competitors $2.87 billion $625.83 million 26.52

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.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
QUALCOMM 1 16 11 0 2.36
QUALCOMM Competitors 472 2687 4043 194 2.54

QUALCOMM presently has a consensus target price of $64.27, suggesting a potential upside of 23.15%. As a group, “Communications & Networking” companies have a potential upside of 27.56%. Given QUALCOMM’s peers stronger consensus rating and higher possible upside, analysts clearly believe QUALCOMM has less favorable growth aspects than its peers.

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 4.4%. 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 2.0% and pay out 40.9% of their earnings in the form of a dividend. QUALCOMM has increased its dividend for 6 consecutive years.

Institutional and Insider Ownership

77.0% of QUALCOMM shares are held by institutional investors. Comparatively, 64.0% of shares of all “Communications & Networking” companies are held by institutional investors. 0.2% of QUALCOMM shares are held by company insiders. Comparatively, 13.4% of shares of all “Communications & Networking” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

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

QUALCOMM Company Profile

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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