Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (93432)	7/22/2010 10:30:07 AM
From: Jim Mullens	2 Recommendations Read Replies (2) \| Respond to of 196641

JGoren, re: One Time Large Dividend ”The company should have a one-time large dividend before the taxes on dividends go up January 1st. “ >>>>>>>>>>>>>>>>>>>> My email to QCOM IR (snip below) prior to this year’s ASM discussed regular and special dividends to boost the share price. In fact, after the presentation, I briefly spoke with Paul on this issue. Paul’s concern disfavoring a special dividend centered around rewarding long term shareholders. His thinking being, a one time large dividend similar to what MSFT did would not necessarily target long term shareholders, only those currently holding shares or purchasing before the dividend was granted --- (i.e. with the share price falling after the payout). I believe my plan (see below) suggesting a special dividend payable quarterly for up to two years ( $0.20/ qtr for 8 quarters) would satisfy Paul’s concerns. Re: 2011 dividend tax increase, it’s my understanding that the admin- ….+ is not planning on repealing the current tax treatment on folk’s earnings under $250k ….+ raising the rate from 15% to 20% on those above $250k. >>>>>>>>>>>>>>>> Creative Solutions to Increase / Sustain at Least 15% Annual Growth in the Share Price A- Dividends: Regular & Special- Current cash & marketable securities together with recurring cash flow should be more than adequate to fund both increasing the regular and a temporary special dividend. Increasing the regular dividend and implementing a special dividend should provide a strong signal to the markets of QUALCOMM’s confidence in its intentions / ability to sustain long term earnings growth. …………………………………………. 12/ 2008…….12/ 2009 ..Pro Forma Free Cash Flow…………$ 3.4B……… $ 1.3B ..Cash & Marketable Securities- …+ Domestic…………………………. $ 6.6B……… $ 8.6B …+ Offshore…………………………....... 6.5 ………..10.3 …+ Total……………………………….. $13.1…………$18.9 ..Dividends…. …+ Regular dividend- increase to $0.20/ qtr…$0.80 x 1.7B shares = $1.36B / year …+ Special dividend- @ $0.20 / gtr ………….$0.80 x 1.7B shares = $1.36B / year (2 years) …+ Total…………………………………………$1.60 x 1.7B shares = $2.72B / year ………………….$1.60 / $40 per share = 4% dividend yield B- New Approach to Strategic Planning / Internal Budget Development I believe a new approach to strategic planning / budget development is needed, with the primary focus on bottom line results--- growing EPS at least 15% annually. ..1) Per current procedures- ……a) carefully estimate the best / worst case ranges (hi /low) for QUALCOMM’s various markets (device sales, chip sales, ASPs, etc). ……b) Estimate the revenue ranges (hi / low) from those market metrics ..2) Develop internal budgets (COGS / Opex / headcount ) with required reductions if necessary, to achieve bottom line / EPS growth of at least 15% YoY growth--- based on the low revenue range---. ………Note- As mentioned above, if 15% EPS growth cannot be achieved, supplement the shortfall with a special dividend so that both the EPS growth percentage and dividend yield percentage when added together equals 15%. ..3) Prioritize and rank all projects and all employees (productively / value) for potential elimination / deferral / dismissal if required to meet bottom line targets. ..4) Continually monitor revenue and bottom line performance to those budgets and further reduce expenses / headcount accordingly if revenue targets fall short.

To: JGoren who wrote (93432)	7/22/2010 1:38:08 PM
From: Jacob Snyder	8 Recommendations Read Replies (2) \| Respond to of 196641

re: one-time large dividend When companies do this, it has zero sustainable effect on the stock price. Investors buy before the ex-div date, and sell after. Here's what Qualcomm (the company) could do to give QCOM (the stock) more respect: 1. Increase dividends gradually, making sure they can do at least a small increase every year. Investors love consistency. 2. Target a 5% dividend yield, to be reached 3 years from now. Make a public commitment, to be a Dividend Aristocrat eventually. 3. Stable share count. Ideally, end employee options; incentives should be stock, which must be held at least 5 years, and which is fully paid for when granted. 4. Target GAAP EPS growth of 10%/year, consistently. Other things being equal, 10% EPS growth = 10% stock price increase per year. 5. 5% dividend yield + 10% stock price increase = 15%/y return for investors.