- Broadcom raised its dividend by 10.2 percent as AVGO dividends gain renewed investor attention.
- Shares have fallen more than 20 percent despite strong AI revenue and solid cash flow.
- Income investors face a choice between a rare pullback and a still‑modest yield.
Dividend hike and yield
Broadcom announced a 10.2 percent increase to its quarterly payout, lifting it to 0.65 dollars per share from 0.59 dollars.
This moves the annualized payout to 2.60 dollars and places the forward yield near 0.77 percent at a share price of about 352 dollars.
The stock will trade ex dividend on 22 December, so shareholders must own the stock before that date to receive the 31 December payment.
The expected price adjustment on the ex dividend date should be minimal due to the relatively small payout.
Business momentum supports the raise
The dividend increase is backed by rising free cash flow and continued strength in Broadcom’s semiconductor and software operations.
Quarterly revenue reached 18.01 billion dollars and EPS performance exceeded expectations, highlighted in reports noting a strong earnings beat.
AI demand remains a major driver as AI‑related revenue grew 74 percent year over year, marking the eleventh consecutive quarter of accelerating AI traction.
The company also added an 11 billion dollar order from Anthropic, reinforcing Broadcom’s role as a key provider of custom AI silicon and networking hardware.
Dividend safety outlook
Free cash flow for FY25 is tracking around 27 billion dollars, offering substantial coverage for the dividend even as capex rises.
Management’s decision to increase the dividend despite margin pressure signals confidence in long‑term cash‑flow durability.
Analysts noted that Broadcom’s AI semiconductor segment and VMware subscription software business continue to generate strong recurring revenue.
Recent pullback in AVGO shares
Despite strong fundamentals, AVGO shares have experienced a steep decline of roughly 21 percent this week following earnings.
Investors reacted to concerns that rapid AI hardware growth could weigh on margins, even though long‑term demand remains intact.
One report highlighted the stock falling about 20 percent, while another cited a broader 22 percent pullback that analysts view as overdone.
The volatility appears to be sentiment driven as revenue continues to grow and backlog remains solid.
However, investors are questioning whether Broadcom’s premium valuation is still warranted during near‑term margin compression.
Key considerations for dividend investors
Broadcom’s yield remains low at roughly 0.7 to 0.8 percent even after the pullback.
Dividend growth remains strong with a long record of double‑digit increases supported by ample free cash flow.
Execution risk persists as the product mix shifts heavily toward AI hardware, which could pressure margins for several quarters.
The recent correction may appeal to long‑term dividend investors who prioritize compounding over initial yield.
The ex dividend date is approaching, so investors seeking the upcoming payout must act before 22 December.
AVGO remains a high‑quality dividend growth story despite its modest yield, and the current volatility offers one of the most attractive entry points seen this year for investors focused on long‑term AVGO dividends and enduring cash generation.
