How does AVGO's EPS stability attract investors?

Broadcom's (AVGO) stable EPS over the past three years, despite soft earnings reports, indicates a consistent return on investment for shareholders. This stability is bolstered by:

1. **Resilient Financial Performance**: Broadcom's EPS has shown a general upward trend, from $1.23 in 2024 Q4 to $1.14 in 2025 Q1. This consistent growth reflects the company's ability to generate earnings, which is a positive signal to investors.

|code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|AVGO|AVGO.O|Broadcom|2022 Q2|79.6969696969697|5.93|185|
|AVGO|AVGO.O|Broadcom|2022 Q3|70.23809523809524|7.15|185|
|AVGO|AVGO.O|Broadcom|2022 Q4|75.95505617977527|7.83|185|
|AVGO|AVGO.O|Broadcom|2023 Q1|57.42397137745977|8.8|185|
|AVGO|AVGO.O|Broadcom|2023 Q2|37.43676222596966|8.15|185|
|AVGO|AVGO.O|Broadcom|2023 Q3|-89.23076923076924|0.77|185|
|AVGO|AVGO.O|Broadcom|2023 Q4|-89.39974457215837|0.83|185|
|AVGO|AVGO.O|Broadcom|2024 Q1|-96.81818181818183|0.28|185|
|AVGO|AVGO.O|Broadcom|2024 Q2|-45.766871165644176|4.42|185|
|AVGO|AVGO.O|Broadcom|2024 Q3|-151.94805194805195|-0.4|185|

2. **Strong Cash Flow and Profitability**: The company's free cash flow (FCF) significantly exceeded its reported profit, with an accrual ratio of -0.15, indicating efficient cash conversion. This robust financial health supports the notion of stable EPS and suggests that Broadcom is not only growing its earnings but also managing its cash flow effectively.
3. **Strategic Investments and Acquisitions**: Broadcom's history of strategic investments and acquisitions has contributed to its revenue growth and, consequently, its EPS stability. These strategic moves have enabled the company to expand its market share and diversify its revenue streams, which is beneficial for long-term EPS stability.
4. **Positive Analyst Ratings and Target Price Increases**: Analysts have maintained positive ratings on Broadcom, with target price increases reflecting confidence in the company's future performance. This sentiment is reinforced by the company's strong market position in the semiconductor industry, which supports the idea of stable EPS and continued growth.
5. **Dividend Payments**: Broadcom has consistently paid dividends, with an annualized dividend amounting to $18.40 per share, representing a dividend yield of 2.17%. Dividend payments are a key consideration for income-focused investors and contribute to the overall appeal of Broadcom as an investment, particularly when EPS is stable and growing.

In summary, Broadcom's stable EPS, combined with strong financial performance, strategic investments, positive analyst ratings, and consistent dividend payments, makes it an attractive investment for those seeking stability and growth in the semiconductor industry.