Critical Review: QUALCOMM (QCOM) vs. Nokia Oyj (NOK)
QUALCOMM (NYSE: NOK) and Nokia Oyj (NYSE:NOK) are both large-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.
This table compares QUALCOMM and Nokia Oyj’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings for QUALCOMM and Nokia Oyj, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
QUALCOMM presently has a consensus price target of $66.59, suggesting a potential downside of 4.57%. Nokia Oyj has a consensus price target of $5.39, suggesting a potential downside of 6.02%. Given QUALCOMM’s stronger consensus rating and higher probable upside, equities research analysts clearly believe QUALCOMM is more favorable than Nokia Oyj.
Risk and Volatility
QUALCOMM has a beta of 1.57, indicating that its share price is 57% more volatile than the S&P 500. Comparatively, Nokia Oyj has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.
Earnings and Valuation
This table compares QUALCOMM and Nokia Oyj’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|QUALCOMM||$22.29 billion||4.60||$2.47 billion||$3.78||18.46|
|Nokia Oyj||$26.15 billion||1.23||-$1.69 billion||$0.37||15.49|
QUALCOMM has higher earnings, but lower revenue than Nokia Oyj. Nokia Oyj is trading at a lower price-to-earnings ratio than QUALCOMM, indicating that it is currently the more affordable of the two stocks.
QUALCOMM pays an annual dividend of $2.48 per share and has a dividend yield of 3.6%. Nokia Oyj pays an annual dividend of $0.20 per share and has a dividend yield of 3.5%. QUALCOMM pays out 65.6% of its earnings in the form of a dividend. Nokia Oyj pays out 54.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. QUALCOMM has increased its dividend for 7 consecutive years. QUALCOMM is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
77.4% of QUALCOMM shares are held by institutional investors. Comparatively, 6.8% of Nokia Oyj shares are held by institutional investors. 0.2% of QUALCOMM shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
QUALCOMM beats Nokia Oyj on 14 of the 17 factors compared between the two stocks.
QUALCOMM Incorporated designs, develops, manufactures, and markets digital communication products worldwide. It operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on code division multiple access (CDMA), orthogonal frequency division multiple access, and other technologies for use in wireless voice and data communications, networking, application processing, multimedia, and global positioning system products. The QTL segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, wideband CDMA, CDMA time division duplex, and/or long term evolution standards and their derivatives. The QSI segment invests in early-stage companies in various industries, including automotive, Internet of things, mobile, data center, and healthcare for supporting the design and introduction of new products and services for voice and data communications, and new industry segments. The company also provides products and services for mobile health; products designed for the implementation of small cells; development, and other services and related products to the United States government agencies and their contractors; and software products, and content and push-to-talk enablement services to wireless operators. In addition, it licenses chipset technology, and products and services for use in data centers. QUALCOMM Incorporated was founded in 1985 and is headquartered in San Diego, California.
About Nokia Oyj
Nokia Corporation engages in the network and technology businesses worldwide. The company operates through four segments: Ultra Broadband Networks, Global Services, IP Networks and Applications, and Nokia Technologies. It provides mobile networking solutions, including hardware, software, and services for telecommunications operators, enterprises, and related markets/verticals. It also offers fixed networking solutions, such as copper based solutions; fiber-to-the-home solutions, including Ethernet point-to-point, gigabit passive optical networks, EPON, and 10 gigabit next generation fiber technologies; fiber access products, solutions, and services; and public switched telephone network transformation, ultra-broadband network design, deployment and operation, site implementation and outside plant, and multi-vendor maintenance services. In addition, the company provides network implementation, care, and professional services for mobile networks; and managed services, such as network and service management, build-operate-transfer model, hosting, analytics, Internet of Things (IoT), cloud, and security operation services for the fixed, mobile, applications, Internet protocol (IP), and optical domains. Further, it offers network planning and optimization services to enhance the network performance and quality, and analytics-based services; and network architecture, integration, customization, and migration services. Additionally, the company provides IP/optical networking solutions, including IP routing and optical transport systems, software, and services; software solutions, such as customer experience management, network operations and management, communications and collaborations, policy and charging, as well as Cloud, IoT, security, and analytics platforms; and submarine networks and radio frequency systems. Nokia Corporation has a collaboration agreement with Filtronic. The company was founded in 1865 and is headquartered in Espoo, Finland.
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