Broadcom (NASDAQ:AVGO) Trading Down 1.7% - What's Next?

Key Points

• Broadcom's stock fell 1.7% to $288.85, with trading volume dropping 71% compared to its average daily volume.
• Several brokerages, including Susquehanna and KeyCorp, have recently raised their price targets for Broadcom, reflecting a generally positive outlook with a consensus rating of "Buy."
• Broadcom announced a quarterly dividend of $0.59, with a dividend yield of 0.8%, indicating a commitment to returning value to shareholders.

Broadcom Inc. (NASDAQ:AVGO - Get Free Report)'s stock price dropped 1.7% on Friday . The stock traded as low as $281.61 and last traded at $288.85. Approximately 7,711,933 shares were traded during trading, a decline of 71% from the average daily volume of 26,788,730 shares. The stock had previously closed at $293.70.

Analyst Ratings Changes

A number of brokerages have recently commented on AVGO. Susquehanna upped their price target on Broadcom from $280.00 to $300.00 and gave the company a "positive" rating in a research note on Friday, June 6th. KeyCorp boosted their price objective on Broadcom from $315.00 to $330.00 and gave the company an "overweight" rating in a research report on Tuesday, July 8th. Erste Group Bank upgraded Broadcom from a "hold" rating to a "buy" rating in a research report on Thursday, June 5th. The Goldman Sachs Group assumed coverage on Broadcom in a research report on Thursday, July 10th. They issued a "buy" rating and a $315.00 price objective for the company. Finally, Truist Financial set a $295.00 price target on Broadcom and gave the stock a "buy" rating in a research report on Friday, June 6th. One analyst has rated the stock with a hold rating, twenty-seven have given a buy rating and three have given a strong buy rating to the stock. According to data from MarketBeat, Broadcom currently has a consensus rating of "Buy" and an average price target of $294.92.

Broadcom Price Performance

The company has a debt-to-equity ratio of 0.89, a quick ratio of 0.98 and a current ratio of 1.08. The firm has a market capitalization of $1.35 trillion, a P/E ratio of 107.79, a price-to-earnings-growth ratio of 2.15 and a beta of 1.12. The business has a 50 day simple moving average of $265.36 and a two-hundred day simple moving average of $224.11.

Broadcom (NASDAQ:AVGO - Get Free Report) last issued its earnings results on Thursday, June 5th. The semiconductor manufacturer reported $1.58 earnings per share for the quarter, beating the consensus estimate of $1.57 by $0.01. Broadcom had a return on equity of 35.49% and a net margin of 22.64%. The company had revenue of $15 billion during the quarter, compared to analysts' expectations of $14.98 billion. During the same period in the prior year, the business posted $10.96 EPS. Broadcom's quarterly revenue was up 20.2% compared to the same quarter last year. On average, sell-side analysts expect that Broadcom Inc. will post 5.38 EPS for the current fiscal year.

Broadcom Dividend Announcement

The firm also recently announced a quarterly dividend, which was paid on Monday, June 30th. Shareholders of record on Friday, June 20th were issued a $0.59 dividend. The ex-dividend date of this dividend was Friday, June 20th. This represents a $2.36 dividend on an annualized basis and a dividend yield of 0.8%. Broadcom's dividend payout ratio (DPR) is presently 88.39%.

Broadcom announced that its Board of Directors has approved a stock buyback program on Monday, April 7th that permits the company to repurchase $10.00 billion in shares. This repurchase authorization permits the semiconductor manufacturer to reacquire up to 1.4% of its shares through open market purchases. Shares repurchase programs are typically a sign that the company's board of directors believes its stock is undervalued.

Insider Activity at Broadcom

In related news, insider Charlie B. Kawwas sold 10,000 shares of the business's stock in a transaction dated Wednesday, June 11th. The stock was sold at an average price of $252.88, for a total value of $2,528,800.00. Following the sale, the insider directly owned 789,784 shares in the company, valued at approximately $199,720,577.92. The trade was a 1.25% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Hock E. Tan sold 117,758 shares of the business's stock in a transaction that occurred on Thursday, June 12th. The stock was sold at an average price of $252.91, for a total value of $29,782,175.78. Following the sale, the chief executive officer directly owned 1,014,152 shares in the company, valued at $256,489,182.32. The trade was a 10.40% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 830,516 shares of company stock valued at $217,224,641 in the last ninety days. Corporate insiders own 2.00% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of AVGO. Barnes Dennig Private Wealth Management LLC purchased a new position in Broadcom in the 1st quarter worth $25,000. Cheviot Value Management LLC acquired a new stake in shares of Broadcom during the 1st quarter valued at about $25,000. Inlight Wealth Management LLC acquired a new stake in Broadcom in the 1st quarter worth about $26,000. Sawyer & Company Inc lifted its stake in Broadcom by 62.1% in the 2nd quarter. Sawyer & Company Inc now owns 94 shares of the semiconductor manufacturer's stock worth $26,000 after purchasing an additional 36 shares in the last quarter. Finally, Sunbeam Capital Management LLC purchased a new position in Broadcom in the 4th quarter worth approximately $28,000. Institutional investors own 76.43% of the company's stock.

About Broadcom

Broadcom Inc designs, develops, and supplies various 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 in two segments, Semiconductor Solutions and Infrastructure Software.

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