Broadcom could sustain its eye-popping 2026 dividend hike

Broadcom conscionable delivered thing astir dividend investors imagination about: a double-digit dividend increase that came close alongside stunning concern results.

The semiconductor and bundle institution announced a 10.2% dividend hike to $0.65 per stock connected Dec. 11, the aforesaid time it reported grounds fourth-quarter gross of $18 billion.

But the bigger question present is whether Broadcom (AVGO) tin support this streak alive. The company's future dividend maturation depends astir wholly connected whether the AI spending roar continues oregon yet cools off.

Broadcom has raised its annual dividend from conscionable $0.19 per share successful fiscal 2016 to $2.42 per stock in fiscal 2025. That's a singular run.

Let’s spot if Broadcom banal tin proceed to rise dividends successful fiscal 2026 and beyond.

Broadcom's dividend way grounds stands out, adjacent successful a marketplace wherever galore tech companies person started paying dividends.

AVGO has accrued its yearly dividend for 15 consecutive years since initiating dividends successful fiscal 2011. This latest 10% summation marks the continuation of that streak.

What's awesome is that Broadcom maintained this dividend maturation adjacent portion making monolithic acquisitions. It completed its $69 cardinal acquisition of VMware successful precocious 2023, 1 of the largest tech deals ever, Reuters reported.

Related: Amazon rival pays 5.6% dividend contempt retail slump

In fiscal 2025, Broadcom returned $17.5 cardinal to shareholders done $11.1 cardinal successful dividends and $6.4 cardinal successful stock buybacks. The institution generated $26.9 cardinal successful escaped currency flow, up 39% twelvemonth implicit year.

CFO Kirsten Spears emphasized the company's committedness during the net call, noting that the caller quarterly dividend of $0.65 per stock implies an yearly dividend of $2.60 per share, indicating a output of little than 1%.

The committee besides approved an hold of the company's stock repurchase program, with $7.5 cardinal remaining, done the extremity of calendar twelvemonth 2026.

• Analysts covering AVGO banal forecast it to grow FCF from $26.9 cardinal successful 2025 to $107 cardinal successful 2029.

• Comparatively, the yearly dividend is projected to grow from $2.42 per stock to $4.60 per share.

• Given an annual dividend disbursal of $12.34 billion, the payout ratio is estimated to amended from 46% successful 2025 to 20% successful 2030.

• Quarterly dividend: $0.65 per share

• Annual dividend: $2.60 per share

• Dividend yield: Approximately 0.8% (based connected caller banal price)

• Payout ratio: Approximately 46% based connected fiscal 2025 escaped currency flow

• Consecutive years of dividend increases: 15 years

• Total shareholder returns successful fiscal 2025: $17.5 billion