DB:1YD

Stock Analysis Report

Executive Summary

Broadcom Inc. designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide.


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Broadcom's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1YD has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

1YD

-1.7%

DE Semiconductor

0.1%

DE Market


1 Year Return

15.9%

1YD

12.9%

DE Semiconductor

14.1%

DE Market

Return vs Industry: 1YD exceeded the German Semiconductor industry which returned 16.7% over the past year.

Return vs Market: 1YD exceeded the German Market which returned 15% over the past year.


Shareholder returns

1YDIndustryMarket
7 Day-1.3%-1.7%0.1%
30 Day3.4%0.7%0.2%
90 Day1.8%11.8%3.3%
1 Year20.3%15.9%14.8%12.9%17.6%14.1%
3 Yearn/a30.1%27.0%14.8%4.8%
5 Yearn/a93.5%85.5%22.2%5.4%

Price Volatility Vs. Market

How volatile is Broadcom's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Broadcom undervalued compared to its fair value and its price relative to the market?

12.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1YD (€292.3) is trading below our estimate of fair value (€328.11)

Significantly Below Fair Value: 1YD is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 1YD is poor value based on its PE Ratio (46.7x) compared to the Semiconductor industry average (28x).

PE vs Market: 1YD is poor value based on its PE Ratio (46.7x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1YD is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: 1YD is overvalued based on its PB Ratio (5.1x) compared to the DE Semiconductor industry average (2.4x).


Next Steps

Future Growth

How is Broadcom forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?

27.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1YD's forecast earnings growth (27.1% per year) is above the savings rate (-0.4%).

Earnings vs Market: 1YD's earnings (27.1% per year) are forecast to grow faster than the German market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1YD's revenue (6.8% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 1YD's revenue (6.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1YD's Return on Equity is forecast to be very high in 3 years time (40.9%).


Next Steps

Past Performance

How has Broadcom performed over the past 5 years?

46.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1YD has a large one-off loss of $741.0M impacting its November 3 2019 financial results.

Growing Profit Margin: 1YD's current net profit margins (12%) are lower than last year (58.9%).


Past Earnings Growth Analysis

Earnings Trend: 1YD's earnings have grown significantly by 46.9% per year over the past 5 years.

Accelerating Growth: 1YD's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1YD had negative earnings growth (-77.9%) over the past year, making it difficult to compare to the Semiconductor industry average (-17.8%).


Return on Equity

High ROE: 1YD's Return on Equity (11%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Broadcom's financial position?


Financial Position Analysis

Short Term Liabilities: 1YD's short term assets ($9.9B) exceed its short term liabilities ($6.9B).

Long Term Liabilities: 1YD's short term assets ($9.9B) do not cover its long term liabilities ($35.6B).


Debt to Equity History and Analysis

Debt Level: 1YD's debt to equity ratio (131.3%) is considered high.

Reducing Debt: 1YD's debt to equity ratio has reduced from 169.4% to 131.3% over the past 5 years.

Debt Coverage: 1YD's debt is well covered by operating cash flow (29.6%).

Interest Coverage: 1YD's interest payments on its debt are well covered by EBIT (3.2x coverage).


Balance Sheet

Inventory Level: 1YD has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1YD's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is Broadcom's current dividend yield, its reliability and sustainability?

4.18%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%1.3%markettop25%3.6%industryaverage1.1%forecastin3Years4.3%

Current dividend yield vs market & industry

Notable Dividend: 1YD's dividend (4.09%) is higher than the bottom 25% of dividend payers in the German market (1.31%).

High Dividend: 1YD's dividend (4.09%) is in the top 25% of dividend payers in the German market (3.59%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 1YD has been paying a dividend for less than 10 years.

Growing Dividend: 1YD's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (164.7%), 1YD's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1YD's dividends in 3 years are forecast to be covered by earnings (53.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.4yrs

Average management tenure


CEO

Hock Tan (67yo)

13.9yrs

Tenure

US$5,042,937

Compensation

Mr. Hock E. Tan is Broadcom President, Chief Executive Officer and Director. He has held this position since March 2006. From September 2005 to January 2008, he served as chairman of the board of Integrate ...


CEO Compensation Analysis

Compensation vs Market: Hock's total compensation ($USD5.04M) is about average for companies of similar size in the German market ($USD4.37M).

Compensation vs Earnings: Hock's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Hock Tan
CEO, President & Executive Director13.9yrsUS$5.04m0.042% $49.5m
Thomas Krause
CFO & Secretary3.9yrsUS$7.33m0.0075% $8.7m
Mark Brazeal
Chief Legal Officer2.9yrsUS$5.82m0.0020% $2.3m
Charlie Kawwas
Senior VP & Chief Sales Officer4.7yrsUS$7.26m0.011% $13.2m
Bryan Ingram
Executive Officer12.3yrsUS$7.56m0.0046% $5.4m
Boon Ooi
Senior Vice President of Global Operations11.1yrsUS$4.93mno data
Kirsten Spears
Chief Accounting Officer3.9yrsno data0.0020% $2.3m
Andy Nallappan
VP of Global Information Technology & Chief Information Officer8.1yrsno datano data
Beatrice Russotto
Director of Investor Relations0yrsno datano data
Debbie Streeter
Vice President of Human Resources0yrsno datano data

6.4yrs

Average Tenure

55yo

Average Age

Experienced Management: 1YD's management team is seasoned and experienced (6.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Hock Tan
CEO, President & Executive Director13.9yrsUS$5.04m0.042% $49.5m
Justine Page
Independent Director0.7yrsUS$60.50k0.00031% $362.2k
Eddy Hartenstein
Lead Independent Director1.2yrsUS$300.67k0.0088% $10.3m
Henry Samueli
Chairman of the Board1.2yrsUS$3.03m1.61% $1.9b
Raul Fernandez
Independent Director0.08yrsno datano data
Gayla Delly
Independent Director2.2yrsUS$347.64k0.00026% $303.8k
Harry You
Independent Director1.1yrsno data0.000060% $70.1k
Peter Marks
Independent Director6.2yrsUS$284.17k0.0083% $9.7m
Check Kian Low
Independent Director3.2yrsUS$271.67k0.00051% $595.9k
Diane Bryant
Independent Director1.1yrsno data0.000060% $70.1k

1.2yrs

Average Tenure

60yo

Average Age

Experienced Board: 1YD's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Broadcom Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Broadcom Inc.
  • Ticker: 1YD
  • Exchange: DB
  • Founded: 2018
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: US$126.406b
  • Listing Market Cap: US$116.850b
  • Shares outstanding: 397.79m
  • Website: https://www.broadcom.com

Number of Employees


Location

  • Broadcom Inc.
  • 1320 Ridder Park Drive
  • San Jose
  • California
  • 95131
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0YXGLSE (London Stock Exchange)YesCommon StockGBUSDAug 2009
1YDDB (Deutsche Boerse AG)YesCommon StockDEEURAug 2009
AVGO *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNAug 2009
BROAWBAG (Wiener Boerse AG)YesCommon StockATEURAug 2009
AVGONasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2009
1YDETLX (Eurotlx)YesCommon StockITEURAug 2009
AVGO34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.2 COM USD0.001BRBRLMay 2019
AVGO.PNasdaqGS (Nasdaq Global Select)8% CNV PFD SER AUSUSDSep 2019

Biography

Broadcom Inc. designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through three segments: Semiconductor Solutions, Infrastructure Software, and Intellectual Property licensing. It provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; Wireless local area network access point SoCs; Ethernet switching and routing application specific standard products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic laser and receiver components. The company also offers RF front end modules, filters, and power amplifiers; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; custom touch controllers; serial attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express switches; fiber channel host bus adapters; read channel based SoCs; custom flash controllers; preamplifiers; and optocouplers, industrial fiber optics, motion control encoders and subsystems, and light emitting diodes. In addition, it provides mainframe and enterprise software solution and cybersecurity solutions. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom Inc. was incorporated in 2018 and is headquartered in San Jose, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 23:26
End of Day Share Price2020/02/18 00:00
Earnings2019/11/03
Annual Earnings2019/11/03


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.