Definitive Analysis
Definitive Analysis

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Broadcom Inc. (AVGO)

Company Dividend Discount ModelIndustry: SemiconductorsSector: Technology

Valuation Snapshot

Stable Growth$111.79 - $296.54$170.94
Multi-Stage$78.65 - $85.81$82.16
Blended Fair Value$126.55
Current Price$362.55
Upside-65.09%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS15.02%39.20%2.302.021.581.451.281.140.870.620.340.15
YoY Growth--13.53%28.37%8.72%13.20%12.25%30.67%41.26%81.37%120.40%83.82%
Dividend Yield--0.63%0.93%1.87%2.49%2.18%2.44%2.86%2.27%1.37%0.77%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)23,126.00
(-) Cash Dividends Paid (M)11,142.00
(=) Cash Retained (M)11,984.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4,625.202,890.751,734.45
Cash Retained (M)11,984.0011,984.0011,984.00
(-) Cash Required (M)-4,625.20-2,890.75-1,734.45
(=) Excess Retained (M)7,358.809,093.2510,249.55
(/) Shares Outstanding (M)4,852.754,852.754,852.75
(=) Excess Retained per Share1.521.872.11
LTM Dividend per Share2.302.302.30
(+) Excess Retained per Share1.521.872.11
(=) Adjusted Dividend3.814.174.41
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$111.79$170.94$296.54
Upside / Downside-69.17%-52.85%-18.21%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)23,126.0024,629.1926,230.0927,935.0429,750.8231,684.6232,635.16
Payout Ratio48.18%56.54%64.91%73.27%81.64%90.00%92.50%
Projected Dividends (M)11,142.0013,926.2417,025.3520,468.5124,287.3528,516.1630,187.53

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)12,645.0312,764.8912,884.75
Year 2 PV (M)14,036.8014,304.1714,574.05
Year 3 PV (M)15,323.0215,762.8916,211.10
Year 4 PV (M)16,509.1417,144.0317,797.07
Year 5 PV (M)17,600.3518,450.4619,333.10
PV of Terminal Value (M)305,541.64320,299.42335,622.01
Equity Value (M)381,656.00398,725.86416,422.07
Shares Outstanding (M)4,852.754,852.754,852.75
Fair Value$78.65$82.16$85.81
Upside / Downside-78.31%-77.34%-76.33%

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