Broadcom: The Best Dividend Growth Stock

Seeking AlphaDividend Ideas | Tech Broadcom: The Best Dividend Growth StockOct. 9, 2020 5:39 AM ET|| About: Broadcom Inc. (AVGO), Includes: AAPL, AMZN, AVGOP, CRM, FB, GOOG, GOOGL, MSFT, ORCL, QCOM, SSNLFby: Michael FitzsimmonsMichael Fitzsimmons Technology, ETFs, Renewable Energy, Oil & gas, GoldSummaryBroadcom CEO Hock Tan has proven to be one of the best M&A executives in the business, buying no less than 10 semiconductor and software companies.
The acquisitions have led to rapid growth in revenue, profits, and most importantly, free cash flow.
It has also led Broadcom to the very top of the list of dividend growth stocks, which is very unusual for a technology company.
In fact, AVGO is my top dividend growth stock pick because the company also has excellent potential for capital appreciation. The combination means top-tier total returns.
Hock Tan, the CEO of Broadcom (AVGO), has proven over the years that he is an absolute wizard when it comes to buying companies, making them more efficient, managing them to maximize their potential, and thus delivering excellent ROIs for the company. Tan has also proven to be a very shareholder-friendly chief executive. As a result, Broadcom's dividend has grown from $1.94/share to $13.00/share over the past five years, making it one of the best dividend growth stocks in the entire S&P 500 (if not the best). The company is my favorite dividend income stock because it also has excellent potential for capital appreciation, making it a total return aristocrat.
M&A
As mentioned earlier, Broadcom has a long and very successful history of buying no less than 10 semiconductor and software companies - including LSI Logic, Emulex, Broadcom, Brocade, Computer Associates, and Symantec Enterprise Security. The full list of acquisitions is shown below - with semiconductor companies on top and software companies on the bottom of the M&A timeline:

Source: September Presentation
As a result, and... Read more