When I last wrote about Broadcom Inc. (AVGO), the global semiconductor maker, I explained that this stock may not look like a top-dividend stock given its modest annual dividend yield, but looks can be deceiving. The basic idea hasn’t changed much since then, while the company’s prospects appear to be getting even better. For one thing, the company saw a slight increase in its dividend yield, which rose from 1.14% in the second quarter to 1.49% in the third quarter of 2024. Additionally, the company beat revenue estimates in the third quarter, bringing in $13.07 billion, resulting in a 47% year-over-year increase. over the year. Traditionally, AVGO also beat EPS estimates by $1.24, as it has done since Q1 2021.

In fact, Broadcom is not unlike a smart and insightful film; The longer you look at it, the more details you find that increase your appreciation for it.

If you want to know more about Broadcom’s dividend status, you can read what our Tipranks writer Michael Byrne has to say about the stock.

But first, let’s examine three key reasons why Broadcom is more than just a dividend king:

• Impressive dividend growth and total returns: Broadcom’s dividend yield may not sound like much, but hidden factors make the company’s colors stand out even more. The company has paid dividends consistently for 13 consecutive years, with a compound annual growth rate (CAGR) of 17.5% over the past five years. Despite a seemingly modest return, Broadcom has delivered a total return of over 3,168% over the last decade, including price appreciation and reinvested dividends. As Michael Byrne noted, an initial investment of $10,000 in Broadcom 10 years ago would be worth about $221,420 today. This consistency and strong performance make Broadcom a notable dividend value opportunity.

• Leader in custom silicon chips and strategic acquisitions: Of course, if you’re one of the largest companies in the world, you probably have a few cards for success up your sleeve. In Broadcom’s case, I’m referring to custom silicon chip manufacturing that is tailored to specific use cases and offers significant energy savings. Some of the better-known customers include Google (GOOGL), Meta (META) and OpenAI. Additionally, in a smart move last November, AVGO acquired VMware for $69 billion, adding a significant software component to its portfolio. This move expanded Broadcom’s revenue streams and solidified its market position.

• Strong financial health and growth prospects: Broadcom is highly profitable. Gross margins are 64% and operating margins are 30.5%. The company is expected to maintain these margins due to its dominance in the silicon chip market and its strict cost management capabilities. AVGO’s P/E ratio of 141.1 suggests a premium valuation, but there’s a reason, as the company is predicted to be a long-term success. In fact, analysts are forecasting significant earnings growth, with earnings per share expected to rise from $4.85 in fiscal 2024 to $6.20 in fiscal 2025.

Is Broadcom a Buy, a Sell or a Hold?

AVGO is considered a Strong Buy on Wall Street based on 21 Buys and 3 Holds. AVGO’s average price target is $200.33, representing an upside potential of 19.14%.

See more AVGO analyst ratings

Diploma

In short, Broadcom is a long-term investment with all the qualities needed to maintain its leadership status in the semiconductor industry. It offers impressive dividend growth, brand-specific custom silicon chips, smart acquisitions, and strong financial health. The company’s consistent performance and growth potential justify its premium valuation, and that’s exactly how the market values ​​AVGO stock and envisions its long-term prospects. All we have to do is take a closer look and see the nuances that complete Broadcom’s overall perspective.