Broadcom (AVGO  ) shares were 7% higher following the company's strong Q4 results which exceeded expectations on the top line, bottom line, and for guidance. The company hiked its dividend and also announced a $10 billion share buyback which equates to over 4% of its market cap.

Overall, Broadcom shares have outperformed the market with a 33% YTD gain with shares hitting new, all-time highs in early trading following its earnings release. Even after recent gains, shares remain reasonably priced with a forward P/E of 18 which is below the S&P 500's (SPY  ) forward P/E of 21 especially considering its 23% increase in earnings, 15% revenue growth, and 22% profit margins.

Inside the Numbers

In Q4, Broadcom reported $7.81 in earnings per share, a 23% increase over last year, beating expectations of $7.74 per share. Revenue also came in at $7.4 billion, a 15% increase from last year, and beating expectations of $7.35 billion.

The company also announced a new $10 billion stock buyback. It also increased its dividend to $4.10 from $3.60, about a 14% increase.

For its fiscal first quarter, Broadcom expects $7.6 billion in revenue which equates to 14% growth from last year, compared to expectations of 9% growth.

Broadcom's earnings also show that it is benefitting from tailwinds that are leading to margin expansion with increased production leading to better unit economics. The company also has considerable pricing power given demand and tight supplies for semiconductors with many companies eager to replenish inventories to prevent disruptions in production.

Some of its leading categories were chips for 5G equipment and WiFi networks in addition to servers. The company is one of the largest and most profitable semiconductor companies and provides exposure to multiple categories within the sector.

However, unlike many of its peers, shares are reasonably priced despite a higher than average growth rate and profit margins. After the stock's gap up, some sort of dip is possible. However, historical odds favor that stock prices outperform following quarters in which they beat expectations and issue guidance above expectations. Therefore, Broadcom should be bought on weakness.