Broadcom Ltd. (AVGO) ranks 5th in yield within the large cap technology

Broadcom’s (NYSE:AVGO) dividend was increased by an impressive 100% last week. Its overall yield is 2.23%. The firm started paying a dividend in 2010.

Broadcom designs, develops, and supplies a range of analog and digital semiconductor connectivity solutions. Its product portfolio comprises broadband access and modems, enterprise and network processors, wireless infrastructure, wireless connectivity, Ethernet communication and switching, and set-top box and media processors. The company’s products are used in various applications, including data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, data center servers and storage, factory automation, power generation and alternative energy systems, and displays. It primarily serves wired infrastructure, wireless communications, enterprise storage, and industrial and other markets in China, the United States, Singapore, and internationally. The company was formerly known as Avago Technologies Limited and changed its name to Broadcom Limited in February 2016. The company was founded in 2005 and is headquartered in Singapore.

Broadcom has maintained an incredible three-year growth rate of dividends of 36.2 percent. Broadcom currently ranks 5th in yield within the large cap technology, semiconductor broad line category. The quarterly dividend for the December payment will be $1.02 versus the prior year rate of $0.51 per share. Broadcom LTd. is not a member of our Top 100 Dividend Stock List (see below).

The dividend will be paid at the new higher rate on December 30, 2016, to shareholders of record at close of business on December 16, 2016. Broadcom is currently priced at $182.07. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
2/14/2016 1.02
9/15/2016 0.51
6/15/2016 0.5
3/16/2016 0.49
12/16/2015 0.44
9/16/2015 0.42
6/17/2015 0.4
3/18/2015 0.38
12/17/2014 0.35
9/17/2014 0.32
6/17/2014 0.29
3/18/2014 0.27
12/18/2013 0.25
9/17/2013 0.23
6/13/2013 0.21
3/21/2013 0.19
12/13/2012 0.17
9/18/2012 0.16
6/14/2012 0.15
3/15/2012 0.13
12/15/2011 0.12
9/15/2011 0.11
6/15/2011 0.09
3/16/2011 0.08
12/13/2010 0.07


Quantitative
 Analysis:

We examine Broadcom upon our five key criteria, which include; 

Category Value Score
Dividend Yield 2.23% 251
Dividend Growth (3 to 6 year avg) 35.7% 35
Forward P/E 12.03  53
S&P Financial Rating BB+ 160
Beta 1.20  175
Total Score   674

Additional quantitative information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr lowest Yield % 5 yr max Yield %
2.23% 36.2% 35.2% 33.3 5.36 2.70 6.30 1.02% 2.23%

Positives;

  • Broadcom maintains an investment grade credit rating and a current dividend yield (2.23%) its five-year maximum.
  • Broadcom has maintained a three-year growth rate of dividends of 36.2 percent.
  • Broadcom’s dividend yield is above that of the S&P 500 Index.

Negatives;

  • Broadcom is trading above its ten-year average price/sales (P/S) ratio.
  • Broadcom maintains a beta of 1.20, higher than the average company.

Latest Earnings & Overall Analysis:

Broadcom issued its earnings data on December 8th. The company reported $3.00 EPS for the quarter, topping the consensus estimate of $2.89 by $0.11. The company had revenue of $4.13 million in Q4, an increase of 9 percent from $3.79 million in the previous quarter and an increase of 125 percent from $1.84 million in the same quarter last year.

Based on the firm’s elevated P/S ratio and high beta, Broadcom does not qualify as a member of our  Top 100 Dividend Stocks

Broadcom Ltd. Dividend Yield Chart (Click to enlarge)

avgo5

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

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