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 scores excellent on profitability, but there are some minor concerns on its financial health. AVGO is not overvalued while it is showing excellent growth. This is an interesting combination.
1. Profitability
1.1 Basic Checks
In the past year AVGO was profitable.
In the past year AVGO had a positive cash flow from operations.
Each year in the past 5 years AVGO has been profitable.
In the past 5 years AVGO always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 6.54%, AVGO is doing good in the industry, outperforming 67.92% of the companies in the same industry.
AVGO's Return On Equity of 16.55% is fine compared to the rest of the industry. AVGO outperforms 78.30% of its industry peers.
AVGO has a better Return On Invested Capital (7.59%) than 71.70% of its industry peers.
The Average Return On Invested Capital over the past 3 years for AVGO is significantly above the industry average of 10.31%.
The last Return On Invested Capital (7.59%) for AVGO is well below the 3 year average (15.60%), which needs to be investigated, but indicates that AVGO had better years and this may not be a problem.
| 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
Looking at the Profit Margin, with a value of 29.93%, AVGO belongs to the top of the industry, outperforming 92.45% of the companies in the same industry.
In the last couple of years the Profit Margin of AVGO has declined.
AVGO's Operating Margin of 38.94% is amongst the best of the industry. AVGO outperforms 96.23% of its industry peers.
In the last couple of years the Operating Margin of AVGO has grown nicely.
AVGO's Gross Margin of 67.30% is amongst the best of the industry. AVGO outperforms 88.68% of its industry peers.
AVGO's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), AVGO is creating some value.
Compared to 1 year ago, AVGO has less shares outstanding
AVGO has more shares outstanding than it did 5 years ago.
AVGO has about the same debt/assets ratio as last year.
2.2 Solvency
An Altman-Z score of 4.26 indicates that AVGO is not in any danger for bankruptcy at the moment.
AVGO has a Altman-Z score (4.26) which is comparable to the rest of the industry.
AVGO has a debt to FCF ratio of 4.13. This is a neutral value as AVGO would need 4.13 years to pay back of all of its debts.
With a Debt to FCF ratio value of 4.13, AVGO perfoms like the industry average, outperforming 55.66% of the companies in the same industry.
AVGO has a Debt/Equity ratio of 1.05. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AVGO (1.05) is worse than 79.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 4.13 | ||
| Altman-Z | 4.26 |
ROIC/WACC0.61
WACC12.38%
2.3 Liquidity
A Current Ratio of 1.33 indicates that AVGO should not have too much problems paying its short term obligations.
AVGO has a Current ratio of 1.33. This is amonst the worse of the industry: AVGO underperforms 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: 75.47% 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.
AVGO shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.94%.
AVGO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.43% yearly.
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
The Earnings Per Share is expected to grow by 18.84% on average over the next years. This is quite good.
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
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
With a Price/Earnings ratio of 33.47, AVGO can be considered very expensive at the moment.
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.
When comparing the Price/Earnings ratio of AVGO to the average of the S&P500 Index (28.91), we can say AVGO is valued inline with the index average.
The Price/Forward Earnings ratio is 24.72, which indicates a rather expensive current valuation of AVGO.
Based on the Price/Forward Earnings ratio, AVGO is valued a bit cheaper than 65.09% of the companies in the same industry.
AVGO's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 20.51.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.47 | ||
| Fwd PE | 24.72 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as AVGO.
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 | 36.18 | ||
| EV/EBITDA | 35.97 |
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.
A more expensive valuation may be justified as AVGO's earnings are expected to grow with 14.42% in the coming years.
PEG (NY)2.52
PEG (5Y)2.2
EPS Next 2Y17.26%
EPS Next 3Y14.42%
5. Dividend
5.1 Amount
AVGO has a Yearly Dividend Yield of 1.61%. 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 1.87. AVGO pays more dividend than 85.85% of the companies in the same industry.
AVGO's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
5.2 History
On average, the dividend of AVGO grows each year by 20.15%, which is quite nice.
AVGO has been paying a dividend for at least 10 years, so it has a reliable track record.
AVGO has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 (5/15/2024, 7:00:00 PM)
After market: 1440 +3.83 (+0.27%)1436.17
+56.14 (+4.07%)
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 Cap665.55B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.61% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
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Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 33.47 | ||
| Fwd PE | 24.72 | ||
| 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)2.52
PEG (5Y)2.2
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