Broadcom (BRCM) & Celestica (CLS) Critical Review

Broadcom (NASDAQ: BRCM) and Celestica (NYSE:CLS) are both technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Earnings & Valuation

This table compares Broadcom and Celestica’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Broadcom N/A N/A N/A $2.30 N/A
Celestica $6.11 billion 0.22 $105.00 million $0.73 14.63

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

Dividends

Broadcom pays an annual dividend of $0.56 per share. Celestica does not pay a dividend. Broadcom pays out 24.3% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Broadcom 19.62% 17.57% 13.12%
Celestica 1.72% 8.84% 4.08%

Insider & Institutional Ownership

71.0% of Celestica shares are owned by institutional investors. 1.0% of Celestica shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Broadcom and Celestica, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Broadcom 0 0 1 0 3.00
Celestica 0 8 3 0 2.27

Broadcom currently has a consensus price target of $216.40, indicating a potential upside of Infinity. Celestica has a consensus price target of $13.36, indicating a potential upside of 25.12%. Given Broadcom’s stronger consensus rating and higher possible upside, research analysts plainly believe Broadcom is more favorable than Celestica.

Summary

Broadcom beats Celestica on 7 of the 12 factors compared between the two stocks.

About Broadcom

Broadcom Corporation (Broadcom) provides semiconductor solutions for wired and wireless communications. The Company offers a portfolio of system-on-a-chip solutions (SoCs) that deliver voice, video, data and multimedia connectivity in the home, office and mobile environments. The Company’s solutions are used globally by manufacturers and are embedded in an array of communications products. The Company operates in two segments: Broadband and Connectivity, and Infrastructure and Networking. Broadcom’s solutions in Broadband and Connectivity segment include set-top box solutions, broadband modem solutions, connectivity solutions and a range of other technologies. Its solutions in Infrastructure and Networking segment include Ethernet switches and PHYs, which includes switches and fabrics; copper and optical transceivers; backplane and optical front-end physical layer devices; processors, and other Infrastructure and Networking technologies.

About Celestica

Celestica Inc. is a provider of supply chain solutions. The Company operates in electronics manufacturing services business segment. The Company offers a range of services to its customers, including design and development, engineering services, supply chain management, new product introduction, component sourcing, electronics manufacturing, assembly and test, complex mechanical assembly, systems integration, precision machining, order fulfillment, logistics and after-market repair and return services. Its products and services serve a range of applications, including servers; storage systems; optical equipment; aerospace and defense electronics; healthcare products and applications; semiconductor equipment, and a range of industrial and alternative energy products, including solar panels and inverters. It designs, manufactures and tests solar panels for the residential, commercial and utility scale markets. It uses technologies in the assembly and testing of its products.

Receive News & Ratings for Broadcom Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Broadcom and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply