Johnson Controls International vs. Broadcom: JCI stock's significantly higher valuation vs. AVGO appears counterintuitive

Last Updated: 8/26/2024

Broadcom Appears To Be A Better Choice Compared To Johnson Controls International

AVGO valuation (P/EBIT) is significantly lower vs. JCI, but AVGO has performed better on growth and better on margins

This disconnect between valuation and financial performance implies that AVGO could be a better buy 

 

Johnson Controls International valuation (P/EBIT) is significantly higher compared to Broadcom

JCI vs. AVGO P/EBIT Change In Last 3 Years: -9.7% vs. -0.3%

Johnson Controls International revenue growth is worse compared to Broadcom

JCI vs. AVGO Revenue Growth:   Last Q: 0.2% vs. 43%; Last 12 Months: 2.8% vs. 22%; Last 3 Years Average: 6.2% vs. 14%

Johnson Controls International's EBIT margin expansion is worse compared to Broadcom

JCI vs. AVGO EBIT Margin Change:   Last 3 Years: 0.8x vs. 1.3x

While Broadcom appears to be the better choice today, how has its stock performed vs. Johnson Controls International in the past?

Since 2020, returns have been:

  • 124% for Johnson Controls International (JCI)
  • 483% for Broadcom (AVGO) 
  • 113% for S&P 500 
  • 469% for Trefis Multi-Strategy Portfolio 

Making Sense Of Counterintuitive Comparisons

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[2] How Do You Find These Counterintuitive Pairs?

[3] If I Were To Decide Based On Counterintuitive Comparisons, How Likely Is It That I Will Make The Right Pick?

[4] Where Can I See More Such Counterintuitive Comparisons?

[5] I Don't Want To Go Through Multiple Comparisons, Can You Simplify Investment Decision For Me?

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