Key Takeaways:
- Broadcom has a 14-year track record of consecutive dividend growth.
- The dividend looks safe today, backed by steady earnings, a low payout ratio, and solid free cash flow.
- Investors looking for a mix of income and growth might find this tech giant surprisingly attractive.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
Dividend growth investing is one of the simplest, most reliable ways to build wealth over time.
Instead of chasing flashy short-term gains, dividend growth investors focus on owning strong companies that consistently raise their dividends year after year.
That means that over time, that steady stream of rising dividend payouts can snowball into serious cash flow.
Broadcom stock is down over 20% since the beginning of this year, but the business has been doing well.
Broadcom offers investors exposure to its AI infrastructure due to its custom chips and networking products that big tech companies rely on.
On top of that, the company’s recent VMware acquisition is starting to look like a smart long-term move, giving Broadcom more recurring software revenue.
Today, Broadcom only offers a 1.3% dividend yield, but it might be a good long-term dividend growth stock because earnings are growing rapidly, and the dividend is expected to grow at double-digit annual rates.
1: Dividend Yield
Currently, Broadcom offers a 1.3% dividend yield.
That might not look sky-high, with some stocks today offering over 8% dividend yields, but that’s not necessarily a bad thing.
Compared to other semiconductor and tech companies, Broadcom’s yield is actually above average. That’s a good sign because it means you’re getting paid to wait for the dividend to grow and for the stock to reach fair value while the business keeps growing.
And while Broadcom’s dividend yield isn’t anywhere near all-time highs, the business is seeing strong earnings and dividend growth.
Find dividend growth stocks today that are even better than Broadcom >>>
2: Dividend Safety
Broadcom’s dividend today looks pretty safe. The company earns plenty of money, has consistent cash flow, and doesn’t overextend itself with what it pays out.
One of the best ways to tell if a dividend is sustainable is by looking at the company’s payout ratio, which shows how much of the company’s profits go towards paying dividends.
You can see that Broadcom’s normalized earnings-per-share far exceed the company’s dividend payments.
The company also has pretty reasonable debt ratios and an excellent interest coverage ratio.
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3: Dividend Growth Potential
Broadcom really shines with its earnings and dividend growth.
This year, earnings are expected to grow 36%, while dividends are expected to grow 9%. Over the next 3 years, both earnings and dividends are expected to grow at over 12% annualized.
Earnings are growing rapidly, and with it, analysts expect dividends to continue growing.
Broadcom keeps expanding into new markets, and the recent acquisition of VMware could open more doors for earnings growth over the long run.
For investors who want growing income, this stock checks a lot of boxes.
Access up to 5 years of analyst forecasts for Broadcom on TIKR >>>
TIKR Takeaway
Broadcom looks like a strong long-term dividend growth stock for investors who want steady income today and the potential for much more growth down the road.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks and was built for investors who think of buying stocks as buying a piece of a business.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
