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Broadcom Rewards Shareholders with Buybacks and Dividends

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Jun. 16 2019, Updated 2:41 a.m. ET

Broadcom’s cash flow

As Broadcom’s (AVGO) cash flow has been robust, it has been rewarding shareholders with dividends and share buybacks. In Q2 2019, the company’s cash flow from operations rose YoY (year-over-year) to $2.67 billion from $2.31 billion, and its capital expenditure rose ~20% YoY to $125 million. Its free cash flow from operations rose YoY to $2.5 billion from $2.1 billion. Broadcom has maintained its fiscal 2019 capex guidance at ~$550 million, and plans to grow its free cash flow by a double-digit percentage despite the challenging market.

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Share buybacks

During the second quarter, Broadcom repurchased 4.7 million shares for ~$1.3 million. The company remains committed to complete its $8 billion buyback program in fiscal 2019.

The company spent ~$1.1 billion on dividends in fiscal 2019’s first quarter. It paid a cash dividend of $2.65 per share on March 29 and plans to continue paying it this year, thereby spending over $4 billion on dividends.

Dividend yield

At an annualized dividend per share of $10.60, Broadcom’s dividend payout is 58.6% and its yield is 3.76%. Peers NVIDIA, Intel, Qualcomm, and Cypress Semiconductor have dividend yields of 0.43%, 2.70%, 3.55%, and 1.99%, respectively.

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