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)

Source: FastGraphs.com

 

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

 

Thanks for reading, and don’t forget to connect with me through Facebook and Twitter.

 

Image by Sira Anamwong at FreeDigitalPhotos.net

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