AVGO vs CSCO: Dividend Yield, Growth & Safety Comparison
Broadcom Inc. (AVGO) and Cisco Systems, Inc. (CSCO) are both in the Information Technology sector, making them natural rivals for dividend investors. CSCO offers a significantly higher 1.89% yield compared to AVGO's 0.71%, a gap of 1.18%. For dividend growth, AVGO leads with a 5-year CAGR of 12.9% versus CSCO's 10.1%. AVGO holds the edge in dividend safety with a "Safe" rating. AVGO is a Dividend Challenger with 6 years of consecutive increases.
Key Metrics Comparison
| Metric | AVGO | CSCO |
|---|
| Dividend Yield | 0.71% | 1.89% |
| Annual Dividend | $2.42 | $1.63 |
| 5-Year CAGR | 12.9% | 10.1% |
| Payout Ratio | 49% | 63% |
| Consecutive Years | 6 | 0 |
| Price | $327.48 | $77.17 |
Yield Comparison
Cisco Systems, Inc. (CSCO) currently yields 1.89%, which is modest for the broader market. That's 1.18% more than Broadcom Inc. (AVGO), which yields 0.71%. In dollar terms, CSCO pays $1.63/share annually versus AVGO's $2.42/share.
Dividend Growth
Over the past five years, AVGO has grown its dividend at a 12.9% CAGR compared to CSCO's 10.1%. AVGO: Dividend growth has been steady, with a 3-year CAGR of 12.7% and a 5-year CAGR of 12.9% (10-year: 28.6%). CSCO: Dividend growth is accelerating — the 3-year CAGR of 18.0% exceeds the 5-year rate of 10.1% and the 10-year rate of 8.5%.
Dividend Safety
AVGO's dividend safety is rated "Safe." The payout ratio of 49% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.0x. CSCO's dividend safety is rated "Moderate." The payout ratio of 63% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x. AVGO's payout ratio of 49% is more conservative than CSCO's 63%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in CSCO generates approximately $189/year in dividend income, compared to $71/year from AVGO — a difference of $118/year. At $100,000, that gap widens to $1180/year.
Verdict
- Best for income: CSCO
- Best for growth: AVGO
- Best for safety: AVGO
Frequently Asked Questions
Which has a higher dividend yield, AVGO or CSCO?
Cisco Systems, Inc. (CSCO) has a higher dividend yield of 1.89% compared to Broadcom Inc. (AVGO) at 0.71%.
Is AVGO or CSCO a better dividend growth stock?
Broadcom Inc. has the stronger dividend growth with a 5-year CAGR of 12.9%, compared to Cisco Systems, Inc.'s 10.1%.
Which is safer for dividend income, AVGO or CSCO?
Broadcom Inc.'s dividend safety is rated "Safe" while Cisco Systems, Inc. is rated "Moderate." The payout ratio of 49% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.0x. The payout ratio of 63% is moderate. The dividend is currently covered by earnings but leaves less room for growth. Earnings cover the dividend 1.6x.
How much income does $10,000 in AVGO vs CSCO generate?
A $10,000 investment in AVGO generates approximately $71/year in dividends, while the same amount in CSCO generates about $189/year.
Is AVGO or CSCO a Dividend Aristocrat?
Broadcom Inc. is a Dividend Challenger with 6 consecutive years of increases. Cisco Systems, Inc. does not currently qualify for aristocrat status.
Which has a lower payout ratio, AVGO or CSCO?
Broadcom Inc. has a lower payout ratio of 49% compared to Cisco Systems, Inc.'s 63%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
AVGO vs CSCO: which is better for retirement income?
It depends on your priorities. CSCO for current income, AVGO for dividend growth, AVGO for safety. Many retirement investors hold both for diversification.
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