BROADCOM INC (AVGO)
US11135F1012 - Common Stock
Overall AVGO gets a fundamental rating of 6 out of 10. We evaluated AVGO against 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 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.
AVGO had a positive operating cash flow in the past year.
Each year in the past 5 years AVGO has been profitable.
Each year in the past 5 years AVGO had a positive operating cash flow.
1.2 Ratios
AVGO has a Return On Assets of 6.54%. This is in the better half of the industry: AVGO outperforms 65.42% of its industry peers.
With a decent Return On Equity value of 16.55%, AVGO is doing good in the industry, outperforming 77.57% of the companies in the same industry.
The Return On Invested Capital of AVGO (7.59%) is better than 71.03% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AVGO is above the industry average of 10.93%.
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
AVGO has a Profit Margin of 29.93%. This is amongst the best in the industry. AVGO outperforms 92.52% of its industry peers.
In the last couple of years the Profit Margin of AVGO has declined.
AVGO has a Operating Margin of 38.94%. This is amongst the best in the industry. AVGO outperforms 96.26% of its industry peers.
AVGO's Operating Margin has improved in the last couple of years.
AVGO has a better Gross Margin (67.30%) than 87.85% of its industry peers.
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
AVGO has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for AVGO has been reduced compared to 1 year ago.
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
An Altman-Z score of 4.07 indicates that AVGO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.07, AVGO is in line with its industry, outperforming 57.01% of the companies in the same 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.
AVGO has a Debt to FCF ratio of 4.13. This is comparable to the rest of the industry: AVGO outperforms 52.34% of its industry peers.
A Debt/Equity ratio of 1.05 is on the high side and indicates that AVGO has dependencies on debt financing.
The Debt to Equity ratio of AVGO (1.05) is worse than 81.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.05 | ||
| Debt/FCF | 4.13 | ||
| Altman-Z | 4.07 |
ROIC/WACC0.61
WACC12.35%
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 85.05% of its industry peers.
A Quick Ratio of 1.24 indicates that AVGO should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.24, AVGO is doing worse than 74.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.33 | ||
| Quick Ratio | 1.24 |
3. Growth
3.1 Past
AVGO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 8.41%, which is quite good.
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.
The Revenue has been growing by 11.43% on average over the past years. This is quite good.
EPS 1Y (TTM)8.41%
EPS 3Y24.04%
EPS 5Y15.19%
EPS Q2Q%6.39%
Revenue 1Y (TTM)12.94%
Revenue growth 3Y14.46%
Revenue growth 5Y11.43%
Sales Q2Q%34.17%
3.2 Future
AVGO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 18.84% yearly.
AVGO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.03% yearly.
EPS Next Y13.31%
EPS Next 2Y17.42%
EPS Next 3Y14.37%
EPS Next 5Y18.84%
Revenue Next Year39.01%
Revenue Next 2Y25.75%
Revenue Next 3Y19.99%
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
Based on the Price/Earnings ratio of 30.96, the valuation of AVGO can be described as expensive.
Based on the Price/Earnings ratio, AVGO is valued a bit cheaper than 65.42% of the companies in the same industry.
AVGO's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.05.
A Price/Forward Earnings ratio of 22.81 indicates a rather expensive valuation of AVGO.
Based on the Price/Forward Earnings ratio, AVGO is valued a bit cheaper than the industry average as 66.36% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 20.07. AVGO is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.96 | ||
| Fwd PE | 22.81 |
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.
74.77% of the companies in the same industry are more expensive than AVGO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 33.47 | ||
| EV/EBITDA | 34.32 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates AVGO does not grow enough to justify the current Price/Earnings ratio.
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 14.37% in the coming years.
PEG (NY)2.33
PEG (5Y)2.04
EPS Next 2Y17.42%
EPS Next 3Y14.37%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.54%, AVGO has a reasonable but not impressive dividend return.
AVGO's Dividend Yield is rather good when compared to the industry average which is at 1.79. AVGO pays more dividend than 85.98% of the companies in the same industry.
AVGO's Dividend Yield is slightly below the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
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 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
AVGO pays out 70.09% of its income as dividend. 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 2Y17.42%
EPS Next 3Y14.37%
BROADCOM INC
NASDAQ:AVGO (5/31/2024, 7:24:37 PM)
After market: 1328.56 0.01 (0%)1328.55
-35.53 (-2.6%)
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 Cap615.68B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.54% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS 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)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 30.96 | ||
| Fwd PE | 22.81 | ||
| 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)2.33
PEG (5Y)2.04
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)
High Growth Momentum
Growth
EPS 1Y (TTM)8.41%
EPS 3Y24.04%
EPS 5Y
EPS Q2Q%
EPS Next Y13.31%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)12.94%
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