Balancing Dividends and Fundamentals: The Case of NYSE:BBY.

Our stock screener has spotted BEST BUY CO INC (NYSE:BBY) as a good dividend stock with solid fundamentals. NYSE:BBY shows decent health and profitability. At the same time it gives a good and sustainable dividend. We'll dive into each aspect below.

Evaluating Dividend: NYSE:BBY

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:BBY has been assigned a 8 for dividend:

• With a Yearly Dividend Yield of 4.57%, BBY is a good candidate for dividend investing.
• Compared to an average industry Dividend Yield of 3.27, BBY pays a better dividend. On top of this BBY pays more dividend than 93.10% of the companies listed in the same industry.
• BBY's Dividend Yield is rather good when compared to the S&P500 average which is at 2.28.
• On average, the dividend of BBY grows each year by 15.34%, which is quite nice.
• BBY has been paying a dividend for at least 10 years, so it has a reliable track record.
• BBY has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.

Deciphering NYSE:BBY's Health Rating

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:BBY was assigned a score of 6 for health:

• An Altman-Z score of 3.81 indicates that BBY is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.81, BBY is in the better half of the industry, outperforming 77.59% of the companies in the same industry.
• BBY has a debt to FCF ratio of 1.12. This is a very positive value and a sign of high solvency as it would only need 1.12 years to pay back of all of its debts.
• BBY's Debt to FCF ratio of 1.12 is amongst the best of the industry. BBY outperforms 82.76% of its industry peers.
• BBY has a Debt/Equity ratio of 0.37. This is a healthy value indicating a solid balance between debt and equity.

What does the Profitability looks like for NYSE:BBY

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:BBY, the assigned 7 is noteworthy for profitability:

• BBY's Return On Assets of 7.46% is fine compared to the rest of the industry. BBY outperforms 78.45% of its industry peers.
• BBY has a better Return On Equity (41.21%) than 91.38% of its industry peers.
• With an excellent Return On Invested Capital value of 19.60%, BBY belongs to the best of the industry, outperforming 87.07% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for BBY is significantly above the industry average of 12.38%.
• The 3 year average ROIC (25.19%) for BBY is well above the current ROIC(19.60%). The reason for the recent decline needs to be investigated.
• Looking at the Profit Margin, with a value of 3.01%, BBY is in the better half of the industry, outperforming 68.10% of the companies in the same industry.

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For an up to date full fundamental analysis you can check the fundamental report of BBY

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.