Broadcom could sustain its eye-popping 2026 dividend hike

Core Insights - Broadcom announced a 10.2% increase in its dividend to $0.65 per share alongside record fourth-quarter revenue of $18 billion [1][2] - The company's future dividend growth is heavily reliant on the continuation of the AI spending boom [2] - Broadcom has successfully raised its annual dividend from $0.19 per share in fiscal 2016 to $2.42 per share in fiscal 2025, marking a significant growth trajectory [2] Dividend Performance - Broadcom has increased its annual dividend for 15 consecutive years since initiating dividends in fiscal 2011, with the latest increase reinforcing this trend [3] - The company returned $17.5 billion to shareholders in fiscal 2025, comprising $11.1 billion in dividends and $6.4 billion in share buybacks [5] - The new quarterly dividend of $0.65 per share implies an annual dividend of $2.60 per share, resulting in a yield of approximately 0.8% [5][9] Financial Metrics - Broadcom generated $26.9 billion in free cash flow in fiscal 2025, reflecting a 39% year-over-year increase [5] - Analysts forecast free cash flow to grow from $26.9 billion in 2025 to $107 billion in 2029, while the annual dividend is projected to increase from $2.42 per share to $4.60 per share [8] - The payout ratio is expected to improve from 46% in 2025 to 20% in 2030 [8][9] Share Repurchase Program - The board approved an extension of the share repurchase program, with $7.5 billion remaining through the end of calendar year 2026 [6]