- I rate Broadcom as a buy because of the reasonable valuation, strong free cash flow generation, and shareholder-friendly management.
- It has a high free cash flow conversion and uses that to pay a high dividend. It currently yields a 3.17% dividend and repurchases shares quickly.
- The VMware deal looks accretive to the company. It comes with the usual acquisition risks, like increased debt and high cost-cut expectations.
- Broadcom successfully continues its path as a serial acquirer. Hock Tan successfully build a wide semiconductor and enterprise software company.
For further details see:
Broadcom's Free Cash Flow Conversion Is Phenomenal