Is NYSE:ETN a Good Fit for Dividend Investing?

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.

Dividend Examination for NYSE:ETN

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NYSE:ETN earns a 7 out of 10:

• ETN's Dividend Yield is rather good when compared to the industry average which is at 3.40. ETN pays more dividend than 87.91% of the companies in the same industry.
• ETN has paid a dividend for at least 10 years, which is a reliable track record.
• ETN has not decreased their dividend for at least 10 years, which is a reliable track record.
• ETN pays out 39.12% 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.

Health Assessment of NYSE:ETN

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:ETN, the assigned 7 for health provides valuable insights:

• An Altman-Z score of 5.73 indicates that ETN is not in any danger for bankruptcy at the moment.
• The Altman-Z score of ETN (5.73) is better than 86.81% of its industry peers.
• ETN has a debt to FCF ratio of 2.91. This is a good value and a sign of high solvency as ETN would need 2.91 years to pay back of all of its debts.
• ETN has a better Debt to FCF ratio (2.91) than 76.92% of its industry peers.
• A Debt/Equity ratio of 0.45 indicates that ETN is not too dependend on debt financing.
• 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.

Understanding NYSE:ETN's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:ETN scores a 9 out of 10:

• The Return On Assets of ETN (9.60%) is better than 92.31% of its industry peers.
• The Return On Equity of ETN (19.71%) is better than 92.31% of its industry peers.
• With an excellent Return On Invested Capital value of 12.42%, ETN belongs to the best of the industry, outperforming 91.21% of the companies in the same industry.
• The last Return On Invested Capital (12.42%) for ETN is above the 3 year average (9.14%), which is a sign of increasing profitability.
• The Profit Margin of ETN (15.31%) is better than 94.51% of its industry peers.
• In the last couple of years the Profit Margin of ETN has grown nicely.
• ETN has a Operating Margin of 18.71%. This is amongst the best in the industry. ETN outperforms 94.51% of its industry peers.
• ETN's Operating Margin has improved in the last couple of years.
• ETN's Gross Margin of 37.83% is amongst the best of the industry. ETN outperforms 89.01% of its industry peers.
• ETN's Gross Margin has improved in the last couple of years.

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

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

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.