Why NYSE:AME provides a good dividend, while having solid fundamentals.

Last update: Jul 22, 2024

AMETEK INC (NYSE:AME) has caught the attention of dividend investors as a stock worth considering. NYSE:AME excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

Analyzing Dividend Metrics

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NYSE:AME has been assigned a 7 for dividend:

Compared to an average industry Dividend Yield of 2.43, AME pays a better dividend. On top of this AME pays more dividend than 82.61% of the companies listed in the same industry.
On average, the dividend of AME grows each year by 12.17%, which is quite nice.
AME has been paying a dividend for at least 10 years, so it has a reliable track record.
AME has not decreased their dividend for at least 10 years, which is a reliable track record.
18.01% of the earnings are spent on dividend by AME. This is a low number and sustainable payout ratio.
AME's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Assessing Health for NYSE:AME

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:AME has earned a 6 out of 10:

An Altman-Z score of 5.81 indicates that AME is not in any danger for bankruptcy at the moment.
AME has a better Altman-Z score (5.81) than 90.22% of its industry peers.
The Debt to FCF ratio of AME is 1.82, which is an excellent value as it means it would take AME, only 1.82 years of fcf income to pay off all of its debts.
AME has a Debt to FCF ratio of 1.82. This is amongst the best in the industry. AME outperforms 88.04% of its industry peers.
AME has a Debt/Equity ratio of 0.21. This is a healthy value indicating a solid balance between debt and equity.
The current and quick ratio evaluation for AME is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Exploring NYSE:AME's Profitability

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NYSE:AME has earned a 9 out of 10:

AME's Return On Assets of 8.87% is amongst the best of the industry. AME outperforms 86.96% of its industry peers.
With an excellent Return On Equity value of 14.70%, AME belongs to the best of the industry, outperforming 86.96% of the companies in the same industry.
AME's Return On Invested Capital of 11.52% is amongst the best of the industry. AME outperforms 89.13% of its industry peers.
The 3 year average ROIC (11.01%) for AME is below the current ROIC(11.52%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 19.57%, AME belongs to the best of the industry, outperforming 97.83% of the companies in the same industry.
AME's Profit Margin has improved in the last couple of years.
The Operating Margin of AME (25.95%) is better than 98.91% of its industry peers.
In the last couple of years the Operating Margin of AME has grown nicely.
Looking at the Gross Margin, with a value of 36.08%, AME belongs to the top of the industry, outperforming 85.87% of the companies in the same industry.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

Check the latest full fundamental report of AME for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.