Broadcom (AVGO) & Acacia Communications (ACIA) Head to Head Survey

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Broadcom (NASDAQ: AVGO) and Acacia Communications (NASDAQ:ACIA) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares Broadcom and Acacia Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Broadcom 56.32% 30.85% 14.55%
Acacia Communications -1.83% 4.95% 4.20%

Analyst Ratings

This is a breakdown of current recommendations for Broadcom and Acacia Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Broadcom 0 2 32 1 2.97
Acacia Communications 0 6 9 0 2.60

Broadcom presently has a consensus price target of $312.97, suggesting a potential upside of 19.94%. Acacia Communications has a consensus price target of $35.15, suggesting a potential upside of 3.58%. Given Broadcom’s stronger consensus rating and higher possible upside, research analysts plainly believe Broadcom is more favorable than Acacia Communications.

Valuation and Earnings

This table compares Broadcom and Acacia Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Broadcom $17.64 billion 6.39 $1.69 billion $14.30 18.25
Acacia Communications $385.17 million 3.54 $38.50 million $1.19 28.52

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

Risk and Volatility

Broadcom has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, Acacia Communications has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Institutional and Insider Ownership

86.9% of Broadcom shares are owned by institutional investors. Comparatively, 89.9% of Acacia Communications shares are owned by institutional investors. 3.3% of Broadcom shares are owned by company insiders. Comparatively, 33.2% of Acacia Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Broadcom pays an annual dividend of $7.00 per share and has a dividend yield of 2.7%. Acacia Communications does not pay a dividend. Broadcom pays out 49.0% of its earnings in the form of a dividend.

Summary

Broadcom beats Acacia Communications on 12 of the 17 factors compared between the two stocks.

Broadcom Company Profile

Broadcom Limited designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other. The Wired Infrastructure segment provides set-top box system-on-chips (SoCs); cable, digital subscriber line, and passive optical networking central office/consumer premise equipment SoCs; Ethernet switching and routing application products; embedded processors and controllers; serializer/deserializer application specific integrated circuits; optical and copper, and physical layers; and fiber optic laser and receiver components. The Wireless Communications segment offers RF front end modules, filters, and power amplifiers; Wi-Fi, Bluetooth, and global positioning system/global navigation satellite system SoCs; and custom touch controllers. The Enterprise Storage segment provides serial attached small computer system interface, and redundant array of independent disks controllers and adapters; peripheral component interconnect express switches; fiber channel host bus adapters; read channel based SoCs; and preamplifiers. The Industrial & Other segment offers optocouplers, industrial fiber optics, motion control encoders and subsystems, and light emitting diodes. Its products are used in various applications, including enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. The company was formerly known as Avago Technologies Limited and changed its name to Broadcom Limited in February 2016. Broadcom Limited was founded in 2005 and is headquartered in Singapore.

Acacia Communications Company Profile

Acacia Communications, Inc. develops, manufactures, and sells high-speed coherent optical interconnect products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific region. Its products include a series of low-power coherent digital signal processor application-specific integrated circuits and silicon photonic integrated circuits that are integrated into families of optical interconnect modules with transmission speeds ranging from 100 to 400 gigabits per second for use in long-haul, metro, and inter-data center markets. The company sells its products through a direct sales force to network equipment manufacturers, network operators, and cloud service providers. Acacia Communications, Inc. was founded in 2009 and is headquartered in Maynard, Massachusetts.

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