I added more shares to my portfolio with the purchase of Broadcom (AVGO)
6 shares @ $234.47 on 9/10/2018.
5 shares @ $235.16 on 9/14/2018
This increases my forward 12-month dividend income by $77.00 to a total of $6,547.70
I also updated my portfolio page to reflect the change.
Last month I went on a shopping spree, but not the normal shopping spree that most people think about. With last month sell of W.W. Grainger, Inc., I was able to put the proceeds right back to work. Not only did I put it back to work, but I also increase my forward dividend by almost $100.
I find Broadcom to very attractive at the current price. It has a 5-year PE average of 15.7 and the company sports a PE of 11.4. That’s one of the metrics that I like to look at. The other is the divided yield history.
Broadcom 5-year dividend yield is 1.47% and when I bought shares last month, it had a dividend yield around 2.98%. The best part of all this is the company dividend growth history and potential.
The 5-year dividend growth rate is 51.1%. WHAT?!?! Yes, that is correct. The best part is that there most recent increase which happened last year in December was a whopping 71.6%.
CFRA is predicting an 11% earnings growth rate for the next three years. With a double-digit growth rate and a dividend payout of only 23.21%, I see a lot more double-digit dividend increases in the foreseeable future.
Based on 2018 earnings of $20.44 and a 5-year average PE of 15.7, Broadcom fair valued is $316.98. This tells us that the stock is 27% undervalued.
If prices stay at this level and do not run up, I do plan to add more shares. This is why I think that AVGO stock is a BUY.
What do you think of the company? Plan on owning it? or why not?
Image by Sira Anamwong at FreeDigitalPhotos.net