As the first quarter of 2025 ends, income investors are in for rewards, with over 1,000 securities, including stocks and exchange-traded funds (ETFs), set to pay dividends today, March 31.
The payments are a welcome treat, considering the United States stock market has been on a downward spiral over the past three months, with none of the sectors managing to record at least a 10% return.
For investors, dividend-paying equities offer an ideal cushion against such volatility.
However, with over 1,000 securities in the mix, identifying the best opportunities can be challenging. Among them, semiconductor giant Broadcom (NASDAQ: AVGO) stands out.
Why AVGO is a stand-out dividend stock
Broadcom’s dividend remains unchanged at $0.59 per share for today’s payment, with a 30.14% payout ratio. Notably, the American technology firm boasts a 15-year streak of dividend increases, with a 1.25% yield.
The payments follow impressive Q1 2025 results, where adjusted EPS came in at $1.60, beating the $1.49 estimate, and revenue reached $14.92 billion, surpassing the $14.61 billion forecast.
Broadcom’s role in artificial intelligence (AI) remains the cornerstone of its performance, although the sector appears to be cooling off.
During the quarter, the company’s AI revenue surged 77% year-over-year to $4.1 billion. At the same time, its infrastructure software division, boosted by the VMware acquisition, generated $6.7 billion in revenue, marking a 47% year-over-year increase.
What next for AVGO stock?
Although AVGO stock is currently in the red, down 27% year-to-date and trading at $169 at the close of the last session, the company still holds growth potential based on key fundamentals.
At the core of its growth prospects is strong demand for its AI-focused application-specific integrated chips (ASICs), with major customers such as Alphabet and Meta using them to train generative AI models.
Additionally, Broadcom has introduced the industry’s first Face-to-Face (F2F) 3.5D XPUs, offering a sevenfold increase in signal density and 10 times better power efficiency than previous designs.
The firm is also at the forefront of next-gen chip development, with its 3nm XPUs set for mass production in late 2025 and plans for 2nm AI XPUs on the horizon. These innovations could become a significant cash cow for the California-based company.
As things stand, Broadcom expects Q2 2025 AI revenues to rise 44% year-over-year to $4.4 billion, with semiconductor revenue surging 17% to $14.9 billion, making it a compelling investment.
On the other hand, Wall Street remains largely bullish on AVGO stock, with several analysts forecasting sustained growth in the coming quarters. Over at TipRanks, a consensus of 24 experts rates Broadcom as a ‘Strong Buy,’ with an average 12-month price target of $252, an upside of nearly 50%.
However, it should be noted that if AI hype fades and stocks such as Nvidia experience losses, Broadcom could likely follow suit.
Featured image via Shutterstock
