Head to Head Review: Broadcom (AVGO) & MaxLinear (MXL)

Broadcom (NASDAQ: AVGO) and MaxLinear (NYSE:MXL) are both technology companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, dividends, valuation, profitability, risk, earnings and institutional ownership.

Volatility & Risk

Broadcom has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, MaxLinear has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Broadcom and MaxLinear, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Broadcom 0 1 31 1 3.00
MaxLinear 0 0 4 0 3.00

Broadcom presently has a consensus target price of $304.29, suggesting a potential upside of 21.33%. MaxLinear has a consensus target price of $32.00, suggesting a potential upside of 16.83%. Given Broadcom’s higher possible upside, research analysts clearly believe Broadcom is more favorable than MaxLinear.

Insider and Institutional Ownership

88.5% of Broadcom shares are held by institutional investors. Comparatively, 88.6% of MaxLinear shares are held by institutional investors. 3.6% of Broadcom shares are held by company insiders. Comparatively, 11.9% of MaxLinear shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Broadcom and MaxLinear’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Broadcom 10.18% 28.64% 12.68%
MaxLinear 4.73% 20.96% 11.82%

Dividends

Broadcom pays an annual dividend of $7.00 per share and has a dividend yield of 2.8%. MaxLinear does not pay a dividend. Broadcom pays out 178.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings and Valuation

This table compares Broadcom and MaxLinear’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Broadcom $17.64 billion 5.83 $1.69 billion $3.93 63.81
MaxLinear $387.83 million 4.73 $61.29 million $0.26 105.35

Broadcom has higher revenue and earnings than MaxLinear. Broadcom is trading at a lower price-to-earnings ratio than MaxLinear, indicating that it is currently the more affordable of the two stocks.

Summary

Broadcom beats MaxLinear on 12 of the 16 factors compared between the two stocks.

About Broadcom

Broadcom Limited is a designer, developer and global supplier of a range of semiconductor devices with a focus on digital and mixed signal complementary metal oxide semiconductor (CMOS)-based devices and analog III-V based products. The Company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. It offers a range of products that are used in end-products, such as enterprise and data center networking, home connectivity, set-top boxes (STBs), broadband access, telecommunication equipment, smartphones, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Its product portfolio ranges from discrete devices to complex sub-systems that include multiple device types, and also includes firmware for interfacing between analog and digital systems. Its products include mechanical hardware that interfaces with optoelectronic or capacitive sensors.

About MaxLinear

MaxLinear, Inc. is a provider of radio frequency (RF) and mixed-signal integrated circuits for cable and satellite broadband communications and the connected home, and wired and wireless infrastructure markets. The Company’s RF receiver products capture and process digital and analog broadband signals to be decoded for various applications. These products include both RF receivers and RF receiver systems-on-chip (SoCs), which incorporate its radio system architecture and the functionality necessary to receive and demodulate broadband signals, modem solutions, and physical medium devices that provide a constant current source, current-to-voltage regulation, and data alignment and retiming functionality in optical interconnect applications. It provides semiconductor solutions for the connected home, specifically Multimedia over Coax Alliance (MoCA) solutions. It sells its products to original equipment manufacturers (OEMs), module makers and original design manufacturers (ODMs).

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