Qualcomm share price up as company increases dividend by 20%, plans 5-billion-dollar buyback

Qualcomm Inc. is currently considered as the largest provider of mobile-phone chips. It sells both processor chips and wireless modems, but is known as a monopolist over the chips using fast networks, which are known as LTE. The company announced on Tuesday that it increased its quarterly dividend by 20% to 42 cents a share. The company also announced a buyback of an additional 5 billion dollars in shares. This is considered as a strategic move of Qualcomm Inc. to reward its shareholders.

Qualcomm Inc. made an official statement, revealing that the additional buyback authorization brings the total to 7.8 billion dollars. The company also made it clear that more than 28 billion dollars have been returned to its stockholders since 2003 through dividends and buybacks.

The repurchase has already been preceded by another fiscal 2014 buyback, which was estimated to 2 billion dollars in shares. The announcement came right before the annual meeting of the company, at which Steve Mollenkopf officially took over the position of Chief Executive Officer, succeeding Paul Jacobs, who will remain executive chairman of the company.

Over the nine years of his rule as CEO, Mr. Paul Jacobs has proven himself as one of the most successful leaders of the company, who has contributed to its steady growth. Currently, Qualcomm Inc. manages to make higher profit than most chip manufacturers due to the fact it charges handset manufacturers royalties for using its patents.

The plans for the executive change in Qualcomm were announced in October 2013. The statement came quite surprisingly at a moment when Mr. Mollenkopf was considered as one of the most serious applicants for the Chief Executive Officer position at Microsoft Corp., which was finally taken by Mr. Satya Nadella.

Qualcomm Inc. surged by 3.37% on Tuesday to settle the session at $76.11 per share, marking a one-year change of +11.98% and raising the companys market value to $128.71 billion. According to CNN Money, the 37 analysts offering 12-month price forecasts for Qualcomm Inc. have a median target of $82.00, with a high estimate of $90.00 and a low estimate of $50.00. The median estimate represents a +7.74% increase from the previous close.