324.85 USD
+4.8 (+1.5%)
326.5 USD
+1.65 (+0.51%)
Taking everything into account, AVGO scores 7 out of 10 in our fundamental rating. AVGO was compared to 113 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 priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, AVGO could be worth investigating further for growth investing!.
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.
- In the past 5 years AVGO has always been profitable.
- In the past 5 years AVGO always reported a positive cash flow from operatings.
1.2 Ratios
- AVGO's Return On Assets of 13.52% is amongst the best of the industry. AVGO outperforms 84.96% of its industry peers.
- The Return On Equity of AVGO (28.45%) is better than 91.15% of its industry peers.
- With an excellent Return On Invested Capital value of 10.66%, AVGO belongs to the best of the industry, outperforming 82.30% of the companies in the same industry.
- The Average Return On Invested Capital over the past 3 years for AVGO is in line with the industry average of 10.75%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.52% | ||
| ROE | 28.45% | ||
| ROIC | 10.66% |
ROA(3y)12.13%
ROA(5y)12.05%
ROE(3y)31.95%
ROE(5y)34.21%
ROIC(3y)10.89%
ROIC(5y)10.78%
1.3 Margins
- AVGO's Profit Margin of 36.20% is amongst the best of the industry. AVGO outperforms 95.58% of its industry peers.
- AVGO's Profit Margin has improved in the last couple of years.
- With an excellent Operating Margin value of 40.94%, AVGO belongs to the best of the industry, outperforming 96.46% of the companies in the same industry.
- AVGO's Operating Margin has improved in the last couple of years.
- AVGO's Gross Margin of 67.89% is amongst the best of the industry. AVGO outperforms 91.15% of its industry peers.
- AVGO's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 40.94% | ||
| PM (TTM) | 36.2% | ||
| GM | 67.89% |
OM growth 3Y-1.65%
OM growth 5Y17.55%
PM growth 3Y2.31%
PM growth 5Y26.56%
GM growth 3Y0.66%
GM growth 5Y3.66%
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.
- AVGO has more shares outstanding than it did 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 been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 11.15 indicates that AVGO is not in any danger for bankruptcy at the moment.
- AVGO's Altman-Z score of 11.15 is fine compared to the rest of the industry. AVGO outperforms 71.68% of its industry peers.
- AVGO has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as AVGO would need 2.42 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 2.42, AVGO is in the better half of the industry, outperforming 67.26% of the companies in the same industry.
- A Debt/Equity ratio of 0.76 indicates that AVGO is somewhat dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.76, AVGO is doing worse than 77.88% of the companies in the same industry.
- Even though the debt/equity ratio score it not favorable for AVGO, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.76 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 11.15 |
ROIC/WACC0.99
WACC10.75%
2.3 Liquidity
- A Current Ratio of 1.71 indicates that AVGO should not have too much problems paying its short term obligations.
- With a Current ratio value of 1.71, AVGO is not doing good in the industry: 81.42% of the companies in the same industry are doing better.
- A Quick Ratio of 1.58 indicates that AVGO should not have too much problems paying its short term obligations.
- The Quick ratio of AVGO (1.58) is worse than 74.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.71 | ||
| Quick Ratio | 1.58 |
3. Growth
3.1 Past
- AVGO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.47%, which is quite impressive.
- Measured over the past years, AVGO shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.23% on average per year.
- The Revenue has grown by 23.87% in the past year. This is a very strong growth!
- Measured over the past years, AVGO shows a very strong growth in Revenue. The Revenue has been growing by 21.74% on average per year.
EPS 1Y (TTM)40.47%
EPS 3Y21.91%
EPS 5Y25.23%
EPS Q2Q%37.32%
Revenue 1Y (TTM)23.87%
Revenue growth 3Y24.38%
Revenue growth 5Y21.74%
Sales Q2Q%28.18%
3.2 Future
- Based on estimates for the next years, AVGO will show a very strong growth in Earnings Per Share. The EPS will grow by 28.32% on average per year.
- The Revenue is expected to grow by 29.08% on average over the next years. This is a very strong growth
EPS Next Y51.18%
EPS Next 2Y44.47%
EPS Next 3Y37.31%
EPS Next 5Y28.32%
Revenue Next Year53.44%
Revenue Next 2Y44.88%
Revenue Next 3Y37.37%
Revenue Next 5Y29.08%
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 stable.
- 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
- A Price/Earnings ratio of 47.63 indicates a quite expensive valuation of AVGO.
- Compared to the rest of the industry, the Price/Earnings ratio of AVGO indicates a somewhat cheap valuation: AVGO is cheaper than 67.26% of the companies listed in the same industry.
- When comparing the Price/Earnings ratio of AVGO to the average of the S&P500 Index (27.25), we can say AVGO is valued expensively.
- Based on the Price/Forward Earnings ratio of 31.51, the valuation of AVGO can be described as expensive.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of AVGO indicates a somewhat cheap valuation: AVGO is cheaper than 68.14% of the companies listed in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. AVGO is valued slightly more expensive when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 47.63 | ||
| Fwd PE | 31.51 |
4.2 Price Multiples
- AVGO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. AVGO is cheaper than 61.06% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, AVGO is valued a bit cheaper than 65.49% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 57 | ||
| EV/EBITDA | 44.67 |
4.3 Compensation for Growth
- AVGO's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap 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 37.31% in the coming years.
PEG (NY)0.93
PEG (5Y)1.89
EPS Next 2Y44.47%
EPS Next 3Y37.31%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.80%, AVGO is not a good candidate for dividend investing.
- AVGO's Dividend Yield is rather good when compared to the industry average which is at 0.49. AVGO pays more dividend than 82.30% of the companies in the same industry.
- With a Dividend Yield of 0.80, AVGO pays less dividend than the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
- The dividend of AVGO is nicely growing with an annual growth rate of 11.45%!
- 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)11.45%
Div Incr Years14
Div Non Decr Years14
5.3 Sustainability
- 48.18% of the earnings are spent on dividend by AVGO. This is a bit on the high side, but may be sustainable.
- AVGO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP48.18%
EPS Next 2Y44.47%
EPS Next 3Y37.31%
BROADCOM INC / AVGO FAQ
Can you provide the ChartMill fundamental rating for BROADCOM INC?
ChartMill assigns a fundamental rating of 7 / 10 to AVGO.
Can you provide the valuation status for BROADCOM INC?
ChartMill assigns a valuation rating of 5 / 10 to BROADCOM INC (AVGO). This can be considered as Fairly Valued.
Can you provide the profitability details for BROADCOM INC?
BROADCOM INC (AVGO) has a profitability rating of 9 / 10.
How financially healthy is BROADCOM INC?
The financial health rating of BROADCOM INC (AVGO) is 5 / 10.
Can you provide the dividend sustainability for AVGO stock?
The dividend rating of BROADCOM INC (AVGO) is 6 / 10 and the dividend payout ratio is 48.18%.