Analyzing NASDAQ:NTAP's Dividend Potential.

NETAPP INC (NASDAQ:NTAP) has caught the attention of dividend investors as a stock worth considering. NASDAQ:NTAP 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 NASDAQ:NTAP?

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:NTAP has received a 7 out of 10:

• NTAP's Dividend Yield is rather good when compared to the industry average which is at 3.03. NTAP pays more dividend than 80.65% of the companies in the same industry.
• NTAP has been paying a dividend for at least 10 years, so it has a reliable track record.
• NTAP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• NTAP pays out 36.49% of its income as dividend. This is a sustainable payout ratio.
• NTAP's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Understanding NASDAQ:NTAP's Health

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:NTAP has earned a 5 out of 10:

• With a decent Altman-Z score value of 2.97, NTAP is doing good in the industry, outperforming 74.19% of the companies in the same industry.
• The Debt to FCF ratio of NTAP is 1.45, which is an excellent value as it means it would take NTAP, only 1.45 years of fcf income to pay off all of its debts.
• NTAP has a better Debt to FCF ratio (1.45) than 87.10% of its industry peers.
• Even though the debt/equity ratio score it not favorable for NTAP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Looking at the Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NTAP, the assigned 8 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 12.78%, NTAP belongs to the top of the industry, outperforming 90.32% of the companies in the same industry.
• NTAP has a Return On Equity of 129.04%. This is amongst the best in the industry. NTAP outperforms 96.77% of its industry peers.
• With an excellent Return On Invested Capital value of 23.44%, NTAP belongs to the best of the industry, outperforming 83.87% of the companies in the same industry.
• The 3 year average ROIC (15.62%) for NTAP is below the current ROIC(23.44%), indicating increased profibility in the last year.
• The Profit Margin of NTAP (17.78%) is better than 96.77% of its industry peers.
• The Operating Margin of NTAP (21.74%) is better than 93.55% of its industry peers.
• Looking at the Gross Margin, with a value of 71.10%, NTAP belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
• NTAP's Gross Margin has improved in the last couple of years.

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

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.