Recent Buy: Broadcom Limited (AVGO)

ID-100426334 Recent Buy: Broadcom Limited (AVGO)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.




My Thoughts

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.


Screen-Shot-2018-10-03-at-5.55.20-PM Recent Buy: Broadcom Limited (AVGO)



What do you think of the company? Plan on owning it? or why not?


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