The Company in a Nutshell
- Broadcom has had great success in acquiring other companies.
- The company’s shift to the infrastructure software business could be key to its growth and higher margins.
- AVGO RF filters will benefit from the 5G tailwind.
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Latest Quarter Information
What the CEO said: What we say:Investment Thesis
Broadcom is in a growth phase; it manufactures one of the best RF filters used by all high-end smartphones to improve connectivity. We could assume that companies like Apple would not want to use subpar products and risk the quality of their connectivity. AVGO’s large size also brings economies of scale and enables it to build millions of filters. Its growth-by-acquisition strategy has rendered the company an expert in integrating companies. Expect AVGO to benefit from higher spending from cloud customers and telecom providers that are looking to upgrade their infrastructure and networks. We’re very confident in management’s execution and expect AVGO to benefit from higher spending from cloud customers looking to upgrade their infrastructure and networks. The rise of artificial intelligence is another growth vector that will likely be very promising in the coming years. Recent results are driven by strong demand in AVGO’s networking products in AI data centers, as well as custom AI accelerators from hyperscalers.Dividend Triangle
5-Yr Rev. Growth | 0.00 % |
5-Yr EPS Growth | 0.00 % |
5-Yr Div Growth | 0.00 % |
Potential Risks
As AVGO has grown and continues to satisfy its appetite for acquisitions, its debt has grown accordingly. Potential negative events like losing a major partner, a recession, or losing market share could adversely affect the company’s results. If sales decrease, AVGO’s clients may want to renegotiate terms. Broadcom is vulnerable to pricing pressure in negotiations from large clients who have more negotiation power, like Apple and Samsung. With Qualcomm, we saw the kind of damage that a company like Apple could inflict in the event of a disagreement. AVGO began paying back its long-term debt but still has more than $39B on its balance sheet. With higher interest rates, new acquisitions may become a larger burden.
Debt/Equity | 0.00 |
Financial Debt to EBITDA (TTM) | 0.00 |
Current Ratio (Quarterly) | 0.00 |
Credit Score | 0 |
Dividend Growth Perspective
Broadcom isn’t a classic dividend payer. It needs lots of cash to finance its fast growth and the R&D required to keep its edge. Still, the company has successfully increased its dividend yearly since 2010. The payout ratio seems volatile and not within the norm. This is caused by multiple charges related to its acquisitions and other events. Best consult their investor presentation or follow the cash payout ratio. The cash payout ratio is back under control.
The company reported impressive dividend increases in 2021 (+10%), in 2022 (+12%) and in 2023 (+14%). It looks like it will continue its high-single to double-digit dividend growth policy for a few more years.
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Dividend Yield Fwd | 0.00 % |
Dividend Frequency | N/A |
Average 5-Yr Yield | 0.00 % |
Payout Ratio (%) | 0.00 |
Cash Payout Ratio (%) | 0.00 |
DGR 1-Yr | 0.00 |
DGR 3-Yr | 0.00 |
DGR 5-Yr | 0.00 |
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Valuation
(Data for `ddm_recent_annual_dividend` field are missing to build DDM tables)
Video Tutorial: How to Read the Stock Cards DDM Valuation
Market Cap | 0.00 M |
PE Ratio | 0.00 |
Fwd PE | 0.00 |
Price to Book Ratio | 0.00 |
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Value Score | 0 |
- All financial metrics are updated weekly.
- The DSR PRO rating and Dividend Safety Score are updated quarterly.
- The analysis (investment thesis, risk potential, dividend growth perspective and DDM calculation) is reviewed every 6 months.
- The PDF format includes only comments (no metrics) and is reviewed every 6 months.