Broadcom Inc. (NASDAQ:AVGO) has enough cash generation to cover its dividend comfortably. The more consequential question is whether the economics funding that dividend can remain strong as a few large customers account for more of the business. Dividend coverage measures the current cushion; customer bargaining power helps determine how that cushion changes. At September 30's $351.19 share price, the quarterly dividend of $0.65 equated to an annualized yield of about 0.74%. Investors buying the stock for income therefore need growth in that payment or capital appreciation to do much of the work. A safe dividend does not automatically make a $1.68 trillion equity valuation attractive.
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