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Barchart’s Dividend Prospects screener – found approximately in the middle of the website’s customized screener interface – offers one of the most important tools available: passive income. While certainly not a call to abandon a growth-oriented approach, dividends offer much-needed breadth and balance for your holdings.
To use a sports analogy, the top baseball teams – the ones that consistently make it into the playoffs and go deep in the postseason – are the ones that feature healthy, balanced rosters. It’s not just enough to have superstars batting in the top of the order. If the bottom of the order is completely useless, that team will eventually lose some critical games.
Baseball is distinct from many other sports because it relies on long averages. A hot streak isn’t always enough to foster success. Instead, it’s the team that can endure the grind over many months that typically win out in the end. And that’s exactly what dividends provide, bringing productivity for the players betting seventh through ninth.
Of course, not all dividends are equal: otherwise, you would simply buy the highest-yielding company and call it a day. Instead, the aforementioned Dividend Prospects Screener helps investors identify “[b]ullish dividend-paying stocks with strong momentum.”
A public enterprise must undergo rigorous tests before qualifying for this screener. As such, only 21 names appear on this list. One of the most compelling is Qualcomm (QCOM).
QCOM Stock Features a Combo of Technical Momentum and Dividends
Amid the arms race in artificial intelligence, technology firms – especially those that specialize in advanced semiconductors – offer a great arena for passive income. To be fair, the sector isn’t known for delivering blistering yields. That’s the case with QCOM stock, with Qualcomm presently offering a forward dividend yield of 1.56%.
However, the narrative shouldn’t stop there. As one of the top players in the design, manufacturing and marketing of digital wireless telecom products and services, Qualcomm represents an integral component of the broader connectivity ecosystem. Presently, the company offers visual computing and edge computing for machine learning to a variety of Internet-of-Things (IoT)-integrated devices, per its website.
Clearly, the market is taking notice of the opportunity in QCOM stock. Between 2021 through late 2023, shares encountered a negatively tilted trend. But as more money poured into digital intelligence, Qualcomm benefited handsomely. On a year-to-date basis, shares gained over 55%. Not surprisingly, then, the Barchart Technical Opinion indicator rates QCOM a 100% Strong Buy.
It’s not just a garden-variety 100% buy either. Rather, the investment resource notes that QCOM stock ranks in the top 1% of all short-term signal directions. That’s huge.
As for the dividends, QCOM stock isn’t the most generous entity when it comes to yield. However, investors should realize two things. First, the payout ratio sits at 29.97%, implying confidence in terms of yield sustainability. Second, the underlying business is credible. People and industries will likely demand more connectivity, not less. That puts Qualcomm in the driver’s seat.
Oh yeah, if we’re going to be fair, the forward yield of QCOM stock is above the technology sector’s average yield of 1.37%.
Qualcomm Has an Ace Up Its Sleeve
When it comes to AI beneficiaries, it’s impossible not to talk about Nvidia (NVDA). As the top developer of graphics processing units (GPUs) that power the most advanced processes, Nvidia products have been flying out the door. It keeps hammering away at analysts’ earnings targets, resulting in consistently gargantuan growth.
The YTD performance of QCOM stock is impressive, handily beating the tech-centric Nasdaq Composite benchmark. But NVDA is in another league, generating a return of slightly over 169%. In the past 52 weeks, the semiconductor firm saw its shares more than triple. On the other hand, QCOM managed to ring up 75% – a great performance but not an Nvidia-esque performance.
Still, Qualcomm has an ace up its sleeve. It’s not just focused on delivering AI in its core field of mobile communications but it seeks to do so in the most energy efficient manner. This directive is more important than some folks may realize.
As Barchart contributor Tony Daltorio mentioned, the popular AI chatbot ChatGPT uses nearly 10 times as much electricity than a Google search, per the International Energy Agency (IEA). Based on the current trajectory, experts believe that AI will consumer 10X more power by 2026 than it did last year. That’s a startling figure yet several sources have sounded the alarm.
Notably, The Washington Post declared that due to the explosive demand from AI protocols and data centers, the U.S. power grid is strained. Quite frankly, the progress of AI may have to be stunted to protect our resources.
Qualcomm may have a solution, at least in the field of mobile communications. That’s a fundamental catalyst that can keep QCOM stock growing and the dividends flowing. It’s easily one of the top names to consider in Barchart’s Dividend Prospects screener.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
