Nasdaq bear market: 3 ultra-cheap, high-yielding stocks that are crying out to be bought

This has not been a good year for tech stocks, which is evident from the 26.4% drop in tech stocks. Nasdaq-100 index so far in 2022.

However, the brutal liquidation in technology stocks It means that investors can buy some high-yielding, dividend-paying technology stocks cheaply. Intel (INTC -1.39%), Qualcomm (QCOM 5.41%)Y cisco systems (CSCO -0.80%) they are three nasdaq stocks with large dividend yields that exceed the index average of 1.03%, and are trading at attractive valuations.

Let’s see why buying these dividend-paying semiconductor stocks is a no-brainer right now.

1. Intel

Intel shares are down 25% in 2022 and are now trading at just 6.4x ending earnings. This rock-bottom valuation represents a nice discount to Intel’s five-year average earnings multiple of 13.3 and the Nasdaq-100 average. price-earnings (P/G) ratio of 25.

As for the dividend, Intel has a great yield of 3.95%, which is significantly higher than the index average. It’s worth noting that the company has steadily increased its dividend over the years. For example, Intel was paying $0.87 per share in annual dividends in 2012. It now has a forward annual dividend rate of $1.46 per share, meaning the payout has increased at a compound annual rate of 5.3 % during the last decade.

Intel’s latest dividend increase was announced in January this year. The chip giant increased its quarterly dividend by 5% to $0.365 per share. Investors, however, may be concerned whether Intel could keep its big payout given short-term challenges is facing.

The company had generated free cash flow of $11.3 billion in 2021, representing 15% of its gross revenue. This year, however, Intel’s free cash flow is expected to be between minus $2 billion and minus $1 billion, thanks to the company’s focus on increasing its capital spending to regain market share from rivals Its profits are expected to fall 36% this year due to higher spending and a flat top line.

In 2023 and 2024, Intel estimates that its adjusted free cash flow will remain neutral, turning into positive territory only in 2025, when it is expected to represent 20% of revenues. The good news is that Intel was able to maintain its impressive dividend despite short-term problems. That’s because Intel has a breakthrough dividend payout ratio 41% after taking into account the sharp drop in company profits.

Finally, the growth of Intel is expected to start collecting starting in 2025 thanks to its aggressive capex spending, so patient investors could be rewarded with a higher dividend and a healthy long-term stock upside if they buy this chip giant at its cheap valuation this moment.

2. Qualcomm

Qualcomm is another chipmaker that has been hit in the stock market this year, falling more than 31% despite posting impressive growth. The stock is now trading at just 12.8 times ending earnings and 9.4 times future earnings. Buying Qualcomm at these multiples seems like a no-brainer, as it not only has a healthy dividend yield, but also has bright prospects that could send its stock higher in the long run.

Qualcomm has a dividend yield of 2.4%, well above the Nasdaq-100 average. Management had raised the quarterly pay by 10% in March this year to $0.75 per share. It’s worth noting that Qualcomm’s quarterly dividend payout has tripled since 2012. And with a 22.7% payout ratio, it won’t be surprising to see Qualcomm’s dividend rise even higher thanks to the rate at which they’re increasing. your income and earnings.

Qualcomm’s revenue increased 41% year over year in the second quarter of fiscal 2022 (for the three months ending March 27, 2022) to $11.1 billion. The company’s adjusted earnings soared 69% year over year to $3.21 per share during the quarter. Analysts expect Qualcomm to end fiscal 2022 with 33% revenue growth and a 47% increase in profit.

More importantly, Qualcomm is expected to maintain 14% annual earnings growth for the next five years. However, it will not be surprising to see the company post stronger growth thanks to multiple growth engines such as growing demand for its automotive and Internet of Things (IoT) chips, as well as those of Qualcomm healthy position in the smartphone market.

Altogether, Qualcomm looks like a top dividend stocks to buy, and its valuation is evidence that investors should consider going long immediately.

3.Cisco Systems

Cisco Systems is another high-performing stock that is too cheap to ignore. Trading at just 15.4 times ending earnings, Cisco looks like an attractive dividend stock to buy at the moment, considering its impressive 3.5% return. Additionally, Cisco has increased its dividend for 13 consecutive years and has a 43% term dividend payout ratio, which points to more room for growth.

However, Cisco has had short-term problems in multifactor account such as supply chain bottlenecks, lockdowns in China, and Russia’s war against Ukraine. The company’s revenue for the third quarter of fiscal 2022 was flat year-over-year at $12.8 billion, while adjusted earnings were up 5%. But Cisco’s weak guidance was cause for concern.

But then there are signs that Cisco’s business could pick up the pace in the future. The company’s remaining performance obligations increased 7% last quarter to $30.2 billion, representing total deferred revenue and contracts for which customers have not yet been billed. Cisco says it expects to recognize 54% of its remaining performance obligations as revenue over the next 12 months.

Additionally, Cisco has a strong order book worth $15 billion for its hardware and software offerings. The company notes that its backlog increased 130% year over year in the last quarter, and this metric is not included in the calculation of remaining performance obligations. As such, Cisco’s growth rate could improve as demand for its offerings remains strong, so investors looking to buy cheap dividend-paying stocks should take a closer look at this giant. networks.

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