Exploring NASDAQ:MCHP's dividend characteristics.

MICROCHIP TECHNOLOGY INC (NASDAQ:MCHP) is a hidden gem unveiled by our stock screening tool, featuring a promising dividend outlook alongside solid fundamentals. NASDAQ:MCHP demonstrates decent financial health and profitability while ensuring a sustainable dividend. Let's break it down further.

Dividend Analysis for NASDAQ:MCHP

To gauge a stock's dividend quality, ChartMill utilizes a Dividend Rating ranging from 0 to 10. This comprehensive assessment considers various dividend aspects, including yield, history, growth, and sustainability. NASDAQ:MCHP has achieved a 7 out of 10:

• Compared to an average industry Dividend Yield of 2.19, MCHP pays a better dividend. On top of this MCHP pays more dividend than 91.43% of the companies listed in the same industry.
• The dividend of MCHP is nicely growing with an annual growth rate of 11.69%!
• MCHP has been paying a dividend for at least 10 years, so it has a reliable track record.
• MCHP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• MCHP pays out 32.09% of its income as dividend. This is a sustainable payout ratio.

Analyzing Health Metrics

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:MCHP has earned a 5 out of 10:

• An Altman-Z score of 4.64 indicates that MCHP is not in any danger for bankruptcy at the moment.
• MCHP has a debt to FCF ratio of 1.92. This is a very positive value and a sign of high solvency as it would only need 1.92 years to pay back of all of its debts.
• MCHP has a better Debt to FCF ratio (1.92) than 65.71% of its industry peers.
• Although MCHP does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.

A Closer Look at Profitability for NASDAQ:MCHP

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, NASDAQ:MCHP has achieved a 9:

• MCHP has a Return On Assets of 15.16%. This is amongst the best in the industry. MCHP outperforms 80.95% of its industry peers.
• MCHP's Return On Equity of 36.12% is amongst the best of the industry. MCHP outperforms 91.43% of its industry peers.
• The Return On Invested Capital of MCHP (21.46%) is better than 90.48% of its industry peers.
• The 3 year average ROIC (11.80%) for MCHP is below the current ROIC(21.46%), indicating increased profibility in the last year.
• The Profit Margin of MCHP (28.14%) is better than 88.57% of its industry peers.
• In the last couple of years the Profit Margin of MCHP has grown nicely.
• MCHP's Operating Margin of 38.68% is amongst the best of the industry. MCHP outperforms 93.33% of its industry peers.
• MCHP's Operating Margin has improved in the last couple of years.
• MCHP has a better Gross Margin (67.93%) than 88.57% of its industry peers.
• In the last couple of years the Gross Margin of MCHP has grown nicely.

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

Our latest full fundamental report of MCHP contains the most current fundamental analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. 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.