Why Broadcom May Be the Best Dividend Stock to Buy Today

Broadcom Inc (NASDAQ:AVGO) is a technology company that provides semiconductor solutions and infrastructure software. And as more businesses are connecting to the cloud and looking to advance their technological capabilities, Broadcom is positioned for some great growth opportunities ahead.

In its first-quarter results for fiscal 2021, the company's net revenue increased 14% year over year and it projects similar growth in the second quarter.

But despite the solid growth numbers, Broadcom may be an even more attractive buy for its dividend. With a quarterly payout of $3.60 per share, investors are earning a yield of 3% per year. On a $25,000 investment, that would mean you would be collecting $750 every year.

However, you're likely to earn even more from the company as Broadcom has been significantly increasing its payouts in recent years. Going back a decade, to 2011, the company was paying just $0.08 per share. Broadcom's payouts are now 45 times that amount.

Now, growing at such a high rate likely isn't sustainable over the long term but the company's determination to continue growing its yield makes it likely that the dividend hikes will continue, especially as the business does well. In three of the past four fiscal years, Broadcom has posted impressive profit margins of 12% or better.

In the past year, shares of Broadcom are up around 86%. And although the stock may be a bit expensive, trading at 55 times its earnings, its future looks strong. With both growth and dividends, this is an investment that can give investors the best of both worlds.