During my time tracking newsletters at The Hulbert Financial Digest, we found that one of the most successful long-term stock-picking systems was one that relied heavily on upside earnings surprises.

This methodology employed other criteria as well, of course, but earnings surprises were one of the primary ingredients in its secret sauce.

With that in mind, I decided to see which dividend payers did the best job of beating analyst expectations for the calendar second quarter.

But I didn’t stop there. I looked for developed-world dividend stocks that not only beat analyst expectations for earnings, but also exceeded forecasts for sales over the past two calendar quarters.

After all, management has all sorts of ways to artificially boost earnings, while the top line is largely immune to such manipulation. So a beat on both fronts would be pretty meaningful.

And by measuring companies’ performances against analyst forecasts over the past two quarters, I was hoping to find a company whose consecutive sales and earnings beats might reveal either an incredibly steady player or one that’s in the early stages of a crucial turnaround.

Still, I went even further. Upside surprises are about the recent past. But we also want to know what’s in store for the future. So I also looked to see which companies had the most upward revisions for future sales and earnings among Wall Street analysts over the past month.

Naturally, even the select few companies that made this cut still required further examination. Some were the beneficiaries of the moderate recovery in energy prices, while others are a bit riskier than we’d like.

The one firm left standing was wireless communications pioneer Qualcomm Inc. (NSDQ: QCOM).

As income investors who normally lean on utilities for yield, the chipmaker and technology licensor may seem like an odd firm to highlight.

But the stock yields an attractive 3.4%, thanks to a well-covered dividend that has a payout ratio of just 57.4%.

Equally important, Qualcomm has used its copious free cash flow, which has averaged $5.8 billion over the past five fiscal years, to power dividend growth of 20.2% annually over the past five years. The quarterly payout is $0.14 per share, or $0.56 per share annualized.

The $91 billion company has also used excess cash flows to repurchase about $16.1 billion worth of its own shares over the past three fiscal years, reducing shares outstanding by nearly 14%.

Qualcomm’s latest earnings announcement delivered its seventh consecutive quarterly upside surprise, with adjusted EPS surpassing estimates by 19.1% for its fiscal third quarter (the company’s fiscal year ends on Sept. 30).

And Qualcomm also beat top-line forecasts by 7.9%, giving it its sixth sales beat in the past seven quarters.

Meanwhile, 19 analysts upped their forecasts for fiscal-year 2017 adjusted EPS, with the average estimate rising by 1.7% over the past four weeks. And 20 analysts increased their projections for fiscal-year 2017 sales, for an average increase of 1.8% over the past four weeks.

Yes, But …

The bigger picture, however, is somewhat less rosy: Qualcomm is in the midst of emerging from a moderate sales and earnings trough. Both sales and adjusted EPS are expected to bottom this year, with the firm enjoying a moderate recovery thereafter.

The company has suffered as wireless growth slowed in certain markets, while competition for market share heated up as smartphone makers such as Apple and Samsung turned to cheaper, proprietary chips over Qualcomm’s costlier Snapdragon. The firm has also been duking it out with regulators in key markets over how royalties for its licensing business should be calculated.

Nevertheless, management has done an outstanding job of managing analyst expectations during this period of decline. The question is how the company will perform in the future.

Qualcomm’s single greatest asset is its portfolio of essential patents for 3G and 4G mobile networks, which earns it significant royalties from each handset sold. Its dominance in this area means that technology licensing now accounts for nearly one-third of total revenue.

If the next generation of networks remains compatible with 3G and 4G, then Qualcomm’s existing intellectual property could continue to generate substantial royalty income for at least another decade.

To that end, analysts forecast EPS growth of nearly 11% annually over the next five years.

Although Qualcomm’s shares currently trade near their trailing-year high, they remain about 25% below their five-year high. The stock not only trades at a discount to the market, it’s also priced at a discount to industry peers, with a forward price-to-earnings ratio of just 13.3.