Qualcomm earlier this week announced a 14% increase in its quarterly cash dividend.
The San Diego-based chipmaker’s board also authorized the company to buy back up to $15 billion of its common stock. The program replaces a previous one that had a $2.1 billion authorization remaining. Qualcomm plans to repurchase $10 billion in stock within a one-year period.
The boost in its cash dividend raises Qualcomm’s annualized dividend payout to $1.92 per share of common stock. The cash dividend will increase to 48 cents from 42 cents per share of common stock and will be effective for quarterly dividends payable after March 25.
“Our business continues to generate substantial operating cash flow, and today’s announcement represents an important step in returning that cash to our owners while still preserving the strategic flexibility needed to drive stockholder value through growth,” said Qualcomm CEO Steve Mollenkopf, in a written statement.
Standard & Poor’s Capital IQ analyst Ken Leon praised the moves but lowered his rating on Qualcomm from buy to hold.
Tech Trader Daily quoted Leon as saying: “With expected revenue growth in the mid-single digits in FY 15, we see challenges to accelerate top line growth to double-digit with increased competition, reduced revenue from a key equipment customer and uncertainties from China. Nonetheless, we are positive on shareholder actions to up the dividend 14% and new $10B share buyback plan in the next 12 months.”
Leon also upped his target price on the company by $5, to $80.
Bharti Airtel stock rallies
Bharti Airtel saw its stock climb on March 13 after Bharti Group head Sunil Mittal said joint venture partner AXA could be increasing its stake in the company, The Economic Times reported.
Overall, Bharti Airtel’s stock has been inching upward, rallying over 10% in March ahead of the Insurance Bill. The Indian Parliament recently passed a bill proposing to increase overseas investment limit in the insurance sector from 26% to 49%.
Bharti Airtel and AXA remain fully committed to their insurance joint ventures and AXA will step up its equity investment to 49%, The Economic Times quoted Mittal as saying.
In February, Bharti Airtel raised $310 million through a secondary share sale in its mobile tower unit Bharti Infratel, reducing its equity stake to 71.9%.
The Indian carrier said it plans to use the money to reduce debt. It had net debt of almost $11 billion at the end of December, according to Reuters.
