Why NYSE:MDC provides a good dividend, while having solid fundamentals.

Last update: Oct 4, 2023

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

Looking at the Dividend

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NYSE:MDC scores a 8 out of 10:

MDC has a Yearly Dividend Yield of 5.26%, which is a nice return.
MDC's Dividend Yield is rather good when compared to the industry average which is at 3.25. MDC pays more dividend than 95.45% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.68, MDC pays a better dividend.
On average, the dividend of MDC grows each year by 20.09%, which is quite nice.
MDC has paid a dividend for at least 10 years, which is a reliable track record.
As MDC did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
36.43% of the earnings are spent on dividend by MDC. This is a low number and sustainable payout ratio.

Health Examination for NYSE:MDC

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:MDC has achieved a 7 out of 10:

MDC has an Altman-Z score of 3.33. This indicates that MDC is financially healthy and has little risk of bankruptcy at the moment.
The Debt to FCF ratio of MDC is 1.19, which is an excellent value as it means it would take MDC, only 1.19 years of fcf income to pay off all of its debts.
MDC has a better Debt to FCF ratio (1.19) than 75.76% of its industry peers.
Although MDC 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.
MDC has a Current Ratio of 7.24. This indicates that MDC is financially healthy and has no problem in meeting its short term obligations.
MDC has a Current ratio of 7.24. This is amongst the best in the industry. MDC outperforms 84.85% of its industry peers.
MDC has a Quick Ratio of 2.04. This indicates that MDC is financially healthy and has no problem in meeting its short term obligations.
MDC has a better Quick ratio (2.04) than 83.33% of its industry peers.

Profitability Assessment of NYSE:MDC

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:MDC scores a 6 out of 10:

With a decent Return On Assets value of 7.32%, MDC is doing good in the industry, outperforming 60.61% of the companies in the same industry.
MDC's Profit Margin of 7.70% is fine compared to the rest of the industry. MDC outperforms 62.12% of its industry peers.
MDC's Profit Margin has improved in the last couple of years.
MDC has a better Operating Margin (12.14%) than 66.67% of its industry peers.
MDC's Operating Margin has improved in the last couple of years.
MDC's Gross Margin has improved in the last couple of years.

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

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

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.