Why the dividend investor may take a look at NYSE:ETN.

Last update: Aug 26, 2024

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

A Closer Look at Dividend for NYSE:ETN

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:ETN has been assigned a 7 for dividend:

ETN's Dividend Yield is rather good when compared to the industry average which is at 2.37. ETN pays more dividend than 87.78% of the companies in the same industry.
ETN has been paying a dividend for at least 10 years, so it has a reliable track record.
ETN has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
ETN pays out 39.53% of its income as dividend. This is a sustainable payout ratio.
The dividend of ETN is growing, but earnings are growing more, so the dividend growth is sustainable.

Looking at the Health

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:ETN has received a 7 out of 10:

ETN has an Altman-Z score of 5.07. This indicates that ETN is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 5.07, ETN belongs to the best of the industry, outperforming 84.44% of the companies in the same industry.
The Debt to FCF ratio of ETN is 3.26, which is a good value as it means it would take ETN, 3.26 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.26, ETN is in the better half of the industry, outperforming 76.67% of the companies in the same industry.
ETN has a Debt/Equity ratio of 0.45. This is a healthy value indicating a solid balance between debt and equity.
The current and quick ratio evaluation for ETN 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.

Evaluating Profitability: NYSE:ETN

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:ETN has achieved a 9:

With an excellent Return On Assets value of 9.27%, ETN belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
ETN has a Return On Equity of 18.99%. This is amongst the best in the industry. ETN outperforms 92.22% of its industry peers.
ETN has a better Return On Invested Capital (12.11%) than 87.78% of its industry peers.
The 3 year average ROIC (9.14%) for ETN is below the current ROIC(12.11%), indicating increased profibility in the last year.
The Profit Margin of ETN (15.12%) is better than 95.56% of its industry peers.
In the last couple of years the Profit Margin of ETN has grown nicely.
ETN's Operating Margin of 18.57% is amongst the best of the industry. ETN outperforms 93.33% of its industry peers.
ETN's Operating Margin has improved in the last couple of years.
With an excellent Gross Margin value of 37.53%, ETN belongs to the best of the industry, outperforming 90.00% of the companies in the same industry.
ETN's Gross Margin has improved in the last couple of years.

More Best Dividend stocks can be found in our Best Dividend screener.

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

Disclaimer

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.