BROADCOM INC (AVGO)
US11135F1012 - Common Stock
Taking everything into account, AVGO scores 6 out of 10 in our fundamental rating. AVGO was compared to 108 industry peers in the Semiconductors & Semiconductor Equipment industry. While AVGO belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. AVGO is not priced too expensively while it is growing strongly. Keep and eye on this one!
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.
In the past 5 years AVGO has always been profitable.
AVGO had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 3.03%, AVGO perfoms like the industry average, outperforming 56.48% of the companies in the same industry.
With a decent Return On Equity value of 7.76%, AVGO is doing good in the industry, outperforming 60.19% of the companies in the same industry.
The Return On Invested Capital of AVGO (7.75%) is better than 75.00% of its industry peers.
AVGO had an Average Return On Invested Capital over the past 3 years of 15.60%. This is above the industry average of 11.05%.
The 3 year average ROIC (15.60%) for AVGO is well above the current ROIC(7.75%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.03% | ||
| ROE | 7.76% | ||
| ROIC | 7.75% |
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 Profit Margin of 10.88%. This is in the better half of the industry: AVGO outperforms 63.89% of its industry peers.
In the last couple of years the Profit Margin of AVGO has declined.
AVGO's Operating Margin of 31.16% is amongst the best of the industry. AVGO outperforms 91.67% of its industry peers.
AVGO's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 64.33%, AVGO belongs to the top of the industry, outperforming 87.96% of the companies in the same industry.
AVGO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.16% | ||
| PM (TTM) | 10.88% | ||
| GM | 64.33% |
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
AVGO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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.
AVGO has about the same debt/assets ratio as last year.
2.2 Solvency
AVGO has an Altman-Z score of 5.03. This indicates that AVGO is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of AVGO (5.03) is better than 64.81% of its industry peers.
AVGO has a debt to FCF ratio of 3.75. This is a good value and a sign of high solvency as AVGO would need 3.75 years to pay back of all of its debts.
AVGO has a better Debt to FCF ratio (3.75) than 62.04% of its industry peers.
AVGO has a Debt/Equity ratio of 1.02. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of AVGO (1.02) is worse than 84.26% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | 3.75 | ||
| Altman-Z | 5.03 |
ROIC/WACC0.53
WACC14.59%
2.3 Liquidity
A Current Ratio of 1.04 indicates that AVGO should not have too much problems paying its short term obligations.
With a Current ratio value of 1.04, AVGO is not doing good in the industry: 87.96% of the companies in the same industry are doing better.
AVGO has a Quick Ratio of 1.04. This is a bad value and indicates that AVGO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of AVGO (0.94) is worse than 83.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.94 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.05% 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 32.04% in the past year. This is a very strong growth!
The Revenue has been growing by 11.43% on average over the past years. This is quite good.
EPS 1Y (TTM)9.05%
EPS 3Y24.04%
EPS 5Y15.19%
EPS Q2Q%17.65%
Revenue 1Y (TTM)32.04%
Revenue growth 3Y14.46%
Revenue growth 5Y11.43%
Sales Q2Q%47.27%
3.2 Future
The Earnings Per Share is expected to grow by 22.26% on average over the next years. This is a very strong growth
AVGO is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.24% yearly.
EPS Next Y16.69%
EPS Next 2Y22.01%
EPS Next 3Y20.68%
EPS Next 5Y22.26%
Revenue Next Year42.5%
Revenue Next 2Y29.31%
Revenue Next 3Y23.63%
Revenue Next 5Y21.24%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
AVGO is valuated quite expensively with a Price/Earnings ratio of 36.11.
AVGO's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 28.96, AVGO is valued a bit more expensive.
A Price/Forward Earnings ratio of 26.07 indicates a quite expensive valuation of AVGO.
AVGO's Price/Forward Earnings ratio is in line with the industry average.
AVGO is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 23.82, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.11 | ||
| Fwd PE | 26.07 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AVGO is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, AVGO is valued a bit cheaper than the industry average as 68.52% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.05 | ||
| EV/EBITDA | 35.88 |
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 20.68% in the coming years.
PEG (NY)2.16
PEG (5Y)2.38
EPS Next 2Y22.01%
EPS Next 3Y20.68%
5. Dividend
5.1 Amount
AVGO has a Yearly Dividend Yield of 1.24%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.37, AVGO pays a better dividend. On top of this AVGO pays more dividend than 81.48% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.23, AVGO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
5.2 History
The dividend of AVGO is nicely growing with an annual growth rate of 20.14%!
AVGO has paid a dividend for at least 10 years, which is 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)20.14%
Div Incr Years13
Div Non Decr Years13
5.3 Sustainability
AVGO pays out 181.24% of its income as dividend. This is not a sustainable payout ratio.
AVGO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP181.24%
EPS Next 2Y22.01%
EPS Next 3Y20.68%
BROADCOM INC
NASDAQ:AVGO (11/21/2024, 8:13:40 PM)
After market: 163.9 -0.04 (-0.02%)163.94
+0.69 (+0.42%)
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 Cap765.69B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.24% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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EPS beat(8)
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EPS beat(16)
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Revenue beat(2)
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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 | 36.11 | ||
| Fwd PE | 26.07 | ||
| 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)2.16
PEG (5Y)2.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.03% | ||
| ROE | 7.76% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 31.16% | ||
| PM (TTM) | 10.88% | ||
| GM | 64.33% | ||
| 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 Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.02 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.94 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)9.05%
EPS 3Y24.04%
EPS 5Y
EPS Q2Q%
EPS Next Y16.69%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)32.04%
Revenue growth 3Y14.46%
Revenue growth 5Y
Sales 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