Both Broadcom and Home Depot are both top holding for the popular Schwab US Dividend Equity ETF (SCHD). However, if we could only pick one which would it be?
Home Depot is the class leader in its category of Home Improvement with higher profit margins than Lowes as well as return on equity.
Broadcom is a fairly well diversified chip company that is known for doing lots of acquisitions and extracting value out of the companies it acquires.
The return on equity and profit margin of Broadcom is even higher than Home Depot.
One major concern with Broadcom is that Apple is going to be not be using Broadcom chips in the future and will produce their own.
Samsung may follow Apple and make their own chips in the future soon as well.
As a result it seems like Home Depot may be the safer bet over a long period of time.