Financial Review: Broadcom (AVGO) and Its Competitors

Broadcom (NASDAQ:AVGO) is one of 220 publicly-traded companies in the “Semiconductors & Semiconductor Equipment” industry, but how does it compare to its rivals? We will compare Broadcom to related companies based on the strength of its earnings, risk, valuation, institutional ownership, analyst recommendations, profitability and dividends.

Earnings & Valuation

This table compares Broadcom and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Broadcom	$89.10 billion	$23.13 billion	44.09
Broadcom Competitors	$9.80 billion	$2.53 billion	8.78

Broadcom has higher revenue and earnings than its rivals. Broadcom is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of current ratings and price targets for Broadcom and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadcom	0	5	39	1	2.91
Broadcom Competitors	3511	12379	25825	1003	2.57

Broadcom presently has a consensus target price of $530.52, indicating a potential upside of 53.68%. As a group, “Semiconductors & Semiconductor Equipment” companies have a potential upside of 35.68%. Given Broadcom’s stronger consensus rating and higher probable upside, research analysts clearly believe Broadcom is more favorable than its rivals.

Institutional and Insider Ownership

76.4% of Broadcom shares are owned by institutional investors. Comparatively, 54.7% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by institutional investors. 1.9% of Broadcom shares are owned by insiders. Comparatively, 11.8% of shares of all “Semiconductors & Semiconductor Equipment” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Broadcom and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadcom	42.94%	48.33%	23.78%
Broadcom Competitors	-1,255.44%	-126.13%	-3.87%

Dividends

Broadcom pays an annual dividend of $2.60 per share and has a dividend yield of 0.8%. Broadcom pays out 33.2% of its earnings in the form of a dividend. As a group, “Semiconductors & Semiconductor Equipment” companies pay a dividend yield of 0.9% and pay out 29.1% of their earnings in the form of a dividend. Broadcom has increased its dividend for 15 consecutive years. Broadcom lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Risk and Volatility

Broadcom has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500. Comparatively, Broadcom’s rivals have a beta of 2.81, indicating that their average share price is 181% more volatile than the S&P 500.

Summary

Broadcom beats its rivals on 10 of the 15 factors compared.

Broadcom Company Profile

Broadcom Inc. is a global technology company that designs and supplies semiconductor products and infrastructure software. Its semiconductor portfolio includes chips and components used in networking, broadband communications, wireless connectivity, data storage, and industrial applications. The company serves businesses across a range of industries, including communications, enterprise technology, and consumer electronics. Broadcom also provides infrastructure software, including products for virtualization, cloud computing, cybersecurity, and enterprise operations.