AVGO vs. COST: A Head-to-Head Stock Comparison

Company Overview

AVGO’s market capitalization of 1,161.05 billion USD is substantially larger than COST’s 450.31 billion USD, indicating a significant difference in their market valuations.

With betas of 1.12 for AVGO and 0.99 for COST, both stocks show similar sensitivity to overall market movements.

Performance Comparison

This chart compares the performance of AVGO and COST over the past year by tracking the growth of an initial $10,000 investment in each (starting one year ago).

Data is adjusted for dividends and splits.

Valuation Metrics Comparison

This section compares the market valuation of AVGO and COST. Key takeaways regarding their valuation, when viewed within their industry context, are presented in the commentary that follows.

• AVGO’s Price-to-Earnings (P/E) ratio of 115.09 and COST’s P/E ratio of 59.13 are both very high. For AVGO, this elevated P/E suggests that significant expectations for future earnings growth are already built into its stock price, or it may be overvalued. COST’s very high P/E also implies its valuation is rich, possibly indicating market optimism about its prospects or a risk of being overstretched.
• AVGO’s Forward PEG ratio of 5.79 and COST’s Forward PEG ratio of 5.64 are both considered very high. For AVGO, this elevated ratio implies its stock price may incorporate highly optimistic growth assumptions that could be challenging to realize. COST’s very high PEG also suggests its valuation is quite rich relative to its expected earnings growth, potentially indicating overvaluation.
• AVGO’s Price-to-Book (P/B) ratio of 16.61 and COST’s P/B ratio of 17.62 are both very high. For AVGO, this typically means the market assigns a much greater value to the company than its net accounting worth, often due to factors like robust intangible assets or superior growth prospects. COST’s high P/B also suggests investors have high expectations for its future performance and are pricing it well above its book value.

Dividend Comparison

AVGO’s dividend yield of 0.91% is notably higher than COST’s 0.47%, suggesting a stronger emphasis on returning cash to shareholders.

Financial Strength Metrics Comparison

This section evaluates the financial strength of AVGO and COST. Noteworthy observations on their financial resilience, considered from an industry perspective, are detailed in the points that follow.

• COST’s current ratio of 1.00 falls into the low category. This can indicate potential stress on the company's ability to address its short-term liabilities, suggesting that its liquid assets may not provide a strong safety margin over its immediate financial commitments, possibly impacting its operational flexibility.