Why the dividend investor may take a look at NASDAQ:NTAP.

Discover NETAPP INC (NASDAQ:NTAP)—a stock that our stock screener has recognized as a solid dividend pick with strong fundamentals. NASDAQ:NTAP showcases decent financial health and profitability while providing a sustainable dividend. We'll explore the specifics further.

How do we evaluate the Dividend for NASDAQ:NTAP?

ChartMill employs its own Dividend Rating system for all stocks. This score, on a scale of 0 to 10, is determined by evaluating different dividend factors, such as yield, historical performance, dividend growth, and sustainability. NASDAQ:NTAP has been assigned a 7 for dividend:

• NTAP's Dividend Yield is rather good when compared to the industry average which is at 3.01. NTAP pays more dividend than 80.65% of the companies in the same industry.
• NTAP has paid a dividend for at least 10 years, which is a reliable track record.
• NTAP has not decreased their dividend for at least 10 years, which is a reliable track record.
• NTAP pays out 36.49% of its income as dividend. This is a sustainable payout ratio.
• The dividend of NTAP is growing, but earnings are growing more, so the dividend growth is sustainable.

Health Insights: NASDAQ:NTAP

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:NTAP has received a 7 out of 10:

• An Altman-Z score of 3.04 indicates that NTAP is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.04, NTAP is in the better half of the industry, outperforming 70.97% 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's Debt to FCF ratio of 1.45 is amongst the best of the industry. NTAP outperforms 87.10% of its industry peers.
• Although NTAP 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.
• The current and quick ratio evaluation for NTAP 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.

Evaluating Profitability: NASDAQ:NTAP

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 NASDAQ:NTAP, the assigned 8 is a significant indicator of profitability:

• With an excellent Return On Assets value of 12.78%, NTAP belongs to the best of the industry, outperforming 87.10% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 129.04%, NTAP belongs to the top of the industry, outperforming 96.77% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 23.44%, NTAP belongs to the top 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.
• NTAP has a Profit Margin of 17.78%. This is amongst the best in the industry. NTAP outperforms 96.77% of its industry peers.
• Looking at the Operating Margin, with a value of 21.74%, NTAP belongs to the top of the industry, outperforming 93.55% of the companies in the same industry.
• NTAP has a Gross Margin of 71.10%. This is amongst the best in the industry. NTAP outperforms 100.00% of its industry peers.
• In the last couple of years the Gross Margin of NTAP has grown nicely.

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

Keep in mind

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.