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Are there any good reasons to buy a stock that has been rising by leaps and bounds over a decade?

The stock is Qualcomm (NASDAQ:QCOM), and the answer is yes. For five reasons:

First, the company has been boosting its dividend, allowing shareholders to share the success of the company. On Tuesday morning, the company announced a 20% boost of its quarterly dividend, bringing it to $1.40 per share or 1.90%, not bad for a technology company.

Second, the company announced a $5 billion stock buyback, on top of the $2 billion spent last year-stock buybacks are bullish for the stock, as they limit the shares floating in the markets.

Third, the company continues to trade at reasonable valuations (see table)

Company

Recent Price

Forward P/E

Intel (NASDAQ:INTC)

$24.67

13.14

Advanced Micro Devices (NYSE:AMD)

3.70

24.73

Nvidia (NASDAQ:NVDA)

18.7

20.54

Texas Instruments (NASDAQ:TXN)

45.08

18.37

Qualcomm

76.47

13.41

Broadcom (NASDAQ:BRCM)

30.37

11.15

Source; Yahoo.finance.com

Fourth, the company has managed to maintain hefty operating margins and revenue growth, beating its closest competitor, Texas Instruments (see tables).

Texas Instruments versus Qualcomm Financial Performance Statistics in 2014

Texas Instruments

Qualcomm

Dividend

2.70

1.90

Operating Margins

24.45%

29.20

Qtrly Earnings Growth (yoy):

93.60%

--

Qtrly Revenue Growth (yoy):

1.60

10.00

Source: yahoo.finance.com

Texas Instruments versus Qualcomm Financial Performance Statistics in 2011

Texas Instruments

Qualcomm

Dividend

2.50

1.50

Operating Margins

22.55%

30.12

Qtrly Earnings Growth (yoy):

30.40%

20.40%

Qtrly Revenue Growth (yoy):

-2.20

18.30

Source: yahoo.finance.com

Fifth, and perhaps, more important reason to buy Qualcomm's stock is the company's on-going focus on the customer.

As CEO Paul Jacobs put it in a CNBC interview: "One thing I learned early in my career is that I don't make products for myself. I make them for my customers. We invest heavily in R&D, we get our capabilities ready, and we match the demand when it arises."

Qualcomm's customer orientation helps the company address rapid changes in the market landscape, driven by imitation, competition from alternative products, and market saturation. A gadget that is in high demand today may be history one year later, as another gadget replaces it, either because of a lower price or better functionality.

BLACKBERRY (former Research in Motion), for instance, was replaced by the iPhone - as the latter had many advantages over the former, above all, being user friendly.

A customer focused strategy further helps Qualcomm overcome another problem high-technology companies face -- the obsession of engineers with perfection, ending up making perfect machines in terms of engineering specs but useless to customers happen to customers.

A long time ago, for instance, Digital Equipment, which was acquired by Compaq Computer-now part of Hewlett Packard (NYSE:HPQ)-made good computing machines. But that's not what customers wanted. The rest is history.

The Bottom Line: Qualcomm has demonstrated an exceptional ability to begin its R&D activities with the customer, a strategy that has rewarded its stockholders handsomely.

That's why I will stay with the stock.

Source: 5 Reasons To Buy Qualcomm