Better Buy: Skyworks Solutions vs. Broadcom

Skyworks Solutions (NASDAQ: SWKS) and Broadcom (NASDAQ: AVGO) are both diversified chipmakers that are tightly tethered to Apple (NASDAQ: AAPL). Skyworks generated 56% of its revenue from Apple in fiscal 2020, while Broadcom relied on the tech giant for 15% of its sales last year.

Skyworks produces wireless chips for the mobile, automotive, industrial, and Internet of Things markets. Broadcom also sells wireless chips for a wide range of industries, and it expanded into the infrastructure software market over the past two years by buying CA Technologies and Symantec's enterprise security unit.

I compared these two stocks last September and declared that Broadcom's lower dependence on Apple, cheaper valuation, and higher dividend made it a better buy than Skyworks. Since then, Broadcom's stock price has rallied about 20% as Skyworks' stock price advanced just over 10%. But will my thesis hold up throughout the rest of 2021?

Continue reading

Source Fool.com