BROADCOM INC (AVGO)
US11135F1012 - Common Stock
Taking everything into account, AVGO scores 6 out of 10 in our fundamental rating. AVGO was compared to 107 industry peers in the Semiconductors & Semiconductor Equipment industry. AVGO has an excellent profitability rating, but there are some minor concerns on its financial health. AVGO is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
AVGO had positive earnings in the past year.
AVGO had a positive operating cash flow in the past year.
Each year in the past 5 years AVGO has been profitable.
AVGO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
AVGO has a Return On Assets of 6.54%. This is in the better half of the industry: AVGO outperforms 66.04% of its industry peers.
AVGO's Return On Equity of 16.55% is fine compared to the rest of the industry. AVGO outperforms 77.36% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.59%, AVGO is in the better half of the industry, outperforming 68.87% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for AVGO is significantly above the industry average of 10.54%.
The 3 year average ROIC (15.60%) for AVGO is well above the current ROIC(7.59%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.54% | ||
| ROE | 16.55% | ||
| ROIC | 7.59% |
ROA(3y)14.39%
ROA(5y)10.13%
ROE(3y)44.64%
ROE(5y)31.17%
ROIC(3y)15.6%
ROIC(5y)11.44%
1.3 Margins
AVGO has a better Profit Margin (29.93%) than 92.45% of its industry peers.
In the last couple of years the Profit Margin of AVGO has declined.
Looking at the Operating Margin, with a value of 38.94%, AVGO belongs to the top of the industry, outperforming 96.23% of the companies in the same industry.
In the last couple of years the Operating Margin of AVGO has grown nicely.
Looking at the Gross Margin, with a value of 67.30%, AVGO belongs to the top of the industry, outperforming 88.68% of the companies in the same industry.
In the last couple of years the Gross Margin of AVGO has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.94% | ||
| PM (TTM) | 29.93% | ||
| GM | 67.3% |
OM growth 3Y36.06%
OM growth 5Y12.19%
PM growth 3Y52.21%
PM growth 5Y-7.74%
GM growth 3Y6.72%
GM growth 5Y5.97%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so AVGO is still creating some value.
Compared to 1 year ago, AVGO has less shares outstanding
The number of shares outstanding for AVGO has been increased compared to 5 years ago.
The debt/assets ratio for AVGO has remained at the same level compared to a year ago.
2.2 Solvency
AVGO has an Altman-Z score of 3.91. This indicates that AVGO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AVGO (3.91) is comparable to the rest of the industry.
The Debt to FCF ratio of AVGO is 4.13, which is a neutral value as it means it would take AVGO, 4.13 years of fcf income to pay off all of its debts.
AVGO has a Debt to FCF ratio (4.13) which is comparable to the rest of the industry.
AVGO has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
AVGO's Debt to Equity ratio of 1.05 is on the low side compared to the rest of the industry. AVGO is outperformed by 80.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 4.13 | ||
| Altman-Z | 3.91 |
ROIC/WACC0.62
WACC12.33%
2.3 Liquidity
A Current Ratio of 1.33 indicates that AVGO should not have too much problems paying its short term obligations.
AVGO's Current ratio of 1.33 is on the low side compared to the rest of the industry. AVGO is outperformed by 83.96% of its industry peers.
A Quick Ratio of 1.24 indicates that AVGO should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.24, AVGO is not doing good in the industry: 76.42% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.41% over the past year.
The Earnings Per Share has been growing by 15.19% on average over the past years. This is quite good.
The Revenue has grown by 12.94% in the past year. This is quite good.
Measured over the past years, AVGO shows a quite strong growth in Revenue. The Revenue has been growing by 11.43% on average per year.
EPS 1Y (TTM)8.41%
EPS 3Y24.04%
EPS 5Y15.19%
EPS growth Q2Q6.39%
Revenue 1Y (TTM)12.94%
Revenue growth 3Y14.46%
Revenue growth 5Y11.43%
Revenue growth Q2Q34.17%
3.2 Future
Based on estimates for the next years, AVGO will show a quite strong growth in Earnings Per Share. The EPS will grow by 18.84% on average per year.
Based on estimates for the next years, AVGO will show a quite strong growth in Revenue. The Revenue will grow by 18.03% on average per year.
EPS Next Y13.26%
EPS Next 2Y17.26%
EPS Next 3Y14.42%
EPS Next 5Y18.84%
Revenue Next Year38.88%
Revenue Next 2Y25.59%
Revenue Next 3Y19.88%
Revenue Next 5Y18.03%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 30.71 indicates a quite expensive valuation of AVGO.
AVGO's Price/Earnings ratio is a bit cheaper when compared to the industry. AVGO is cheaper than 63.21% of the companies in the same industry.
AVGO is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.11, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 22.68 indicates a rather expensive valuation of AVGO.
Based on the Price/Forward Earnings ratio, AVGO is valued a bit cheaper than 70.75% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AVGO to the average of the S&P500 Index (20.39), we can say AVGO is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.71 | ||
| Fwd PE | 22.68 |
4.2 Price Multiples
AVGO's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, AVGO is valued a bit cheaper than the industry average as 74.53% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.2 | ||
| EV/EBITDA | 32.93 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
AVGO has an outstanding profitability rating, which may justify a higher PE ratio.
AVGO's earnings are expected to grow with 14.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.32
PEG (5Y)2.02
EPS Next 2Y17.26%
EPS Next 3Y14.42%
5. Dividend
5.1 Amount
AVGO has a Yearly Dividend Yield of 1.70%. Purely for dividend investing, there may be better candidates out there.
AVGO's Dividend Yield is rather good when compared to the industry average which is at 2.04. AVGO pays more dividend than 88.68% of the companies in the same industry.
AVGO's Dividend Yield is slightly below the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
5.2 History
The dividend of AVGO is nicely growing with an annual growth rate of 20.15%!
AVGO has been paying a dividend for at least 10 years, so it has a reliable track record.
AVGO has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)20.15%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
70.09% of the earnings are spent on dividend by AVGO. This is not a sustainable payout ratio.
The dividend of AVGO is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP70.09%
EPS Next 2Y17.26%
EPS Next 3Y14.42%
BROADCOM INC
NASDAQ:AVGO (5/8/2024, 9:11:06 AM)
1317.72
+14.61 (+1.12%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSemiconductors & Semiconductor Equipment
GICS IndustrySemiconductors & Semiconductor Equipment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap610.66B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.7% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.71 | ||
| Fwd PE | 22.68 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.32
PEG (5Y)2.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.54% | ||
| ROE | 16.55% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 38.94% | ||
| PM (TTM) | 29.93% | ||
| GM | 67.3% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.22
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)8.41%
EPS 3Y24.04%
EPS 5Y
EPS growth Q2Q
EPS Next Y13.26%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)12.94%
Revenue growth 3Y14.46%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y