Broadcom Corporation (BRCM): Right Time, Right Stock

Exiting the smartphone/tablet market, Texas Instruments Incorporated (NASDAQ:TXN) is currently engaged in expanding the OMAP footprint in embedded applications such as automotive, industrial equipment, enterprise communications, etc. The company expects the embedded markets currently valued at $19 billion to offer greater potential for impressive growth when compared to mobile devices. In 2012, Texas Instruments Incorporated (NASDAQ:TXN) expanded its product portfolio by almost 20%.

*Data from Morningstar on June 29

Intel Corporation (NASDAQ:INTC)’s revenue, growth and reach are undoubtedly far more than Broadcom’s, but the company’s reliance on a fast-declining market segment will hurt it badly. As mentioned earlier, even with Intel as competition, Broadcom has shown mercurial progress. Meanwhile, Intel continued to struggle to keep up with the market averages, and its recent price decline starting from Q3 2012 suggests that the lack of exposure to mobile and tablet manufacturing is affecting the company adversely. Texas Instruments offers a dividend yield of above Broadcom’s and a 3.2% annual payout at recent price levels.

Final verdict

Broadcom’s strong performance will continue to reign supreme over its competitors thanks to a large product offering, innovating its product portfolio and an even larger customer base. Broadcom Corporation (NASDAQ:BRCM) will also benefit from the LTE trend and strong demand for mobile devices and smartphones. While China provides a cause for concern for shareholders, it also provides an opportunity to buy into a company which does not become complacent with its innovative product line and continues to have strong performance.

The article Broadcom: Right Time, Right Stock originally appeared on Fool.com and is written by Marina Avilkina.

Marina Avilkina has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel. Marina is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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