Best Stock Split Stock to Buy: Broadcom Stock vs. Chipotle Stock | AVGO Stock vs. CMG Stock

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주식분할 열풍 속 브로드컴과 치폴레를 비교. 분할은 기업 펀더멘털을 바꾸지 않으며, 브로드컴은 매출·영업이익률·현금흐름에서 우위이고 포워드 PE도 27.6배로 치폴레(48배)보다 낮아 더 매력적이라고 평가. 치폴레는 최고 품질 기업이지만 프리미엄 밸류에이션은 부담이라 브로드컴을 선호.

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01. hey everyone stock splits are increasing in popularity again as the stock market rally in 2024 has boosted stock prices some of the more notable stock splits in recent weeks have been Nvidia Chipotle and broadcom Nvidia is already trading on a split adjusted basis but broadcom and chipotle have yet to split and trade on a split adjusted basis they've made their announcements for the decision to do so in this video I'll compare chipot and broadcom and answer today I want to thank the mly all right so on a preit basis broadcom and chipotle Shares are trading at $1,659 and $3,213 per share respectively these are very high prices and for those of you that don't have access to fractional share buying it might be Out Of Reach so the stock splits will make these shares more affordable and more investors can have access to these two stocks but I've often said that a stock split does not change at company's prospects Revenue profitability cash flow will not be impacted by the stock split the share price will be a fraction of where it was before and so more investors will have access to buy but the fundamental aspects of the business will remain unchanged and that's an important thing to remember as a stock split generates a lot of enthusiasm from investors brings a lot of investors into the market and some investors might not realize that the company's prospects are not changing there is no improvement happening even though there's a lot of enthusiasm around it's just a splitting of the shares a slicing of the shares into smaller pieces that's all that's happening that's important to remember and I wanted to highlight that here again in this video so looking at some of the fundamental aspects of these two businesses you'll notice Revenue growth has been excellent for both uh broadcom increasing all the way up to 42.6 billion in Revenue that's up from a fraction of that amount closer to 6 or five billion in Revenue in 2015 of course broadcom has done excellent job digesting Acquisitions it's been an acquisitive company over the last decade and it's demonstrated skill in making Acquisitions not very many companies have been able to do that in fact most companies making Acquisitions spend wasteful sums of money overpaying for their Acquisitions and then having to make a huge write down later on as they admit to investors that they pay too much but not broadcom broadcom has demonstrated skill and its most recent acquisition of VMware is already going better than expected the company expects that acquisition to pay dividends very quickly as it's found ways to cut costs and increase revenue from that acquisition so already again broadcom demonstrating skill in that regard Chipotle meanwhile has done a great job serving its customers it's been one of the better restaurant companies in the US growing the number of locations and growing the amount of Revenue per location Chipotle was one of the first to embrace the food delivery side of the business and in com combination with its brick and mortar side of the business it's grown very nicely as a result of rising inflation Chipotle has implemented several price increases on its menu and given that its customer based Trends toward higher income individuals they've been able to absorb those price increases and return to Chipotle and not decrease their spending with Chipotle so lots of room for growth for both Chipotle and Brom and they've both demonstrated skill in their respective Fields now when we compare these two on operating profit margin we can see how broadcom has really separated itself from Chipotle starting in 2017 when when their operating profit margins were similar but now you can see broadcom's operating profit margin is more than doubled that of Chipotle and given that broadcom said the recent acquisition of VMware is likely to add to its total operating income and the operating profit margins from VMware are are likely to reach those of broadcom's business uh the rest of broadcom's business which is very profitable it's profit margin is likely to bounce back higher over the next few quarters as it digests this acquisition and makes those cost cutting in Revenue enhancing changes Chipotle meanwhile has done a great job too it's operating profit margin rising to 16.71% as I mentioned earlier the menu price increases are offsetting rising costs for Chipotle and more recently it implemented another round of price increases to offset minimum wage increases in California which is one of its largest markets so 16.71% and management has highlighted that it can approach over 20% in operating profit margin in the long-term so profit margin expansion for both broadcom and Chipotle in the cards for the next few years the next metric to compare is cash flow from operations to sales and again broadcom demonstrates an advantage here with the cash flow from operations to sales at 44% Chipotle meanwhile at 18.6% I will highlight that up until this point Chipotle has been an owned location uh business what do I mean by that chipotle owns all of its restaurants it's uh not a franchisee type business if it chooses to go the franchisee route at some point in the future that would enhance the cash flow from operations the sales ratio and the operating profit margin ratios but it could come at the expense of some other downsides so for now Chipotle choosing to go the owned location route and that business model Choice gives it better total revenue opportunities because it's not only going to be getting a fraction of the revenue through royalties but it also weighs down growth and it weighs down profit margin as it's a slower growth path and a riskier path longer term all right surprisingly Chipotle stock is trading at a much more higher valuation than broadcom Chipotle is trading at a forward PE of 48 compared with broadcom which is trading at a forward PE of 27.6 so if I was to choose between these two stock split stocks to buy today I would choose broadcom stock because of the better performance and because of the cheaper valuation now I will not Chipotle's premium valuation is because it's been a Bes in category business I liken Chipotle to that of Costco Costco has always traded as one of the more expensive brick-and-mortar retailer companies because it's the best inclass and similar with Chipotle it's traded at this premium valuation in the resturant category because it's the best in class so that's why you see this premium valuation for Chipotle still for my preferences I would prefer broadcom over Chipotle acknowledging the fact that chipotle is the best in class in its category however I don't want to pay that premium valuation for a restaurant business so I would pick broadcom over Chipotle