Why Is Everyone Talking About Broadcom Stock Right Now? | AVGO Stock Analysis | AVGO Stock Update

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브로드컴은 75.6% 매출총이익률, 62% 영업이익률 등 뛰어난 수익성을 보유하며, 반도체·소프트웨어 모두 높은 마진을 기록. 분기 FCF 44억 달러(매출의 50%)와 주주환원 약 47억 달러가 강점. 올해 주가가 크게 올라 일부 이익 실현을 권했고, 5~10년 장기 보유는 괜찮다는 입장.

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01. hey everyone in this video I'm going to highlight why everyone is talking about broadcom stock and I'll give you a hint it's because of the profit margins broadcom stock has one of the best profit margins of any of the companies that I follow I have it up there in my Mount Rushmore of businesses alongside some of the other well-known businesses with excellent profit margins you might already know visa and MasterCard but let's get into these excellent profit margins and highlight why this is really attractive for investors so in its most recent quarter broadcom's gross profit margins were 75.6 percent of Revenue that was up about 30 basis points now this is incredible for a company a hardware comp mostly a hardware company right visa and MasterCard I noted earlier they have excellent profit margins but they're not known for you know selling physical products they're more of a financial Network right they have their benefits are the fact that they have a vast resource of merchants that accept Visa and MasterCard as a payment and they also have billions of people that use Visa and master cards in their wallet that network is really their asset that drives their incredible profits broadcom is a little bit different right they're they're selling mostly hardware and generating excellent profit margins their operating profit margin was 62 percent of Revenue and that was actually up 100 basis points year over year now the gross profit margins for the semiconductor segment were approximately 71 percent a little bit less than overall company profit margins because the software segment as I will note here gross profit margins for infrastructure software were 92 percent and the operating profit margin in that segment was 73 truly remarkable profit margins in each of the segments right even the hardware segment semiconductor Solutions gross profit margins were 71 percent and then software is 92 percent of course now you look at these profit margins and you might say well this isn't going to be a growth company right with profit margins like this you can't also be growing Revenue you would be wrong broadcom has done an excellent job in increasing its annual revenue look from 2014 up to 2020 its latest update broadcom's Revenue has more than tripled up to 33.2 billion dollars so not only is the company generating excellent profit margins but it's doing so at larger and larger and larger scale really really impressive to be sure also of course with excellent profit margins comes excellent free cash flow which in the quarter was 4.4 billion representing 50 percent of Revenue in Q2 that means for every dollar in Revenue the company generates 50 percent of it flows to free cash flow that's also impressive because not always do profit margins translate into free cash flow sometimes companies need to use a lot of those profits to reinvest in the business which tends to hold back free cash flow not the case for broadcom the company still generating excellent free cash flow and what's it doing with the cash well it paid 1.9 billion dollars in cash dividends and the company repurchased 2.8 billion dollars in its common stock so returning about 4.7 billion dollars back to shareholders in its most recent quarter and it's no surprise that many investors are talking about broadcom stock kicking the tires and looking at you know what maybe we should add this stock to our portfolio and I would say it would not be a bad idea I had broadcom stock recommended as a buy to start the year now the stock is up considerably in 2023 so I advised some of my viewers if you had bought it early in the year it would be wise to take a little bit of profits trim some of your position here but it's an incredible company buying this stock and holding it for the next five to ten years I would imagine has a decent chance of increasing your wealth in that time all right but