Is NYSE:ETN a Good Fit for Dividend Investing?

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

How do we evaluate the Dividend for NYSE:ETN?

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:ETN has been awarded a 7 for its dividend quality:

• Compared to an average industry Dividend Yield of 3.56, ETN pays a better dividend. On top of this ETN pays more dividend than 88.04% of the companies listed 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.
• ETN's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Health Examination for NYSE:ETN

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:ETN was assigned a score of 8 for health:

• An Altman-Z score of 5.17 indicates that ETN is not in any danger for bankruptcy at the moment.
• With an excellent Altman-Z score value of 5.17, ETN belongs to the best of the industry, outperforming 88.04% of the companies in the same industry.
• 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 Debt to FCF ratio of 2.91. This is in the better half of the industry: ETN outperforms 76.09% of its industry peers.
• A Debt/Equity ratio of 0.45 indicates that ETN is not too dependend on debt financing.
• ETN does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Assessing Profitability for NYSE:ETN

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:ETN, the assigned 9 is a significant indicator of profitability:

• The Return On Assets of ETN (9.60%) is better than 92.39% of its industry peers.
• ETN's Return On Equity of 19.71% is amongst the best of the industry. ETN outperforms 92.39% of its industry peers.
• ETN's Return On Invested Capital of 12.31% is amongst the best of the industry. ETN outperforms 91.30% of its industry peers.
• The last Return On Invested Capital (12.31%) for ETN is above the 3 year average (10.83%), which is a sign of increasing profitability.
• With an excellent Profit Margin value of 15.31%, ETN belongs to the best of the industry, outperforming 95.65% of the companies in the same industry.
• In the last couple of years the Profit Margin of ETN has grown nicely.
• Looking at the Operating Margin, with a value of 18.71%, ETN belongs to the top of the industry, outperforming 96.74% of the companies in the same industry.
• In the last couple of years the Operating Margin of ETN has grown nicely.
• With an excellent Gross Margin value of 37.83%, ETN belongs to the best of the industry, outperforming 89.13% of the companies in the same industry.
• ETN's Gross Margin has improved in the last couple of years.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

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

Keep in mind

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.