Is NYSE:ROK suited for dividend investing?

Last update: Dec 14, 2023

Our stock screener has spotted ROCKWELL AUTOMATION INC (NYSE:ROK) as a good dividend stock with solid fundamentals. NYSE:ROK shows decent health and profitability. At the same time it gives a good and sustainable dividend. We'll dive into each aspect below.

Exploring NYSE:ROK's Dividend

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. NYSE:ROK has received a 7 out of 10:

ROK's Dividend Yield is rather good when compared to the industry average which is at 2.43. ROK pays more dividend than 94.19% of the companies in the same industry.
ROK has been paying a dividend for at least 10 years, so it has a reliable track record.
ROK has not decreased their dividend for at least 10 years, which is a reliable track record.
ROK pays out 39.26% of its income as dividend. This is a sustainable payout ratio.
ROK's earnings are growing more than its dividend. This makes the dividend growth sustainable.

ChartMill's Evaluation of Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:ROK, the assigned 8 for health provides valuable insights:

An Altman-Z score of 5.17 indicates that ROK is not in any danger for bankruptcy at the moment.
ROK has a better Altman-Z score (5.17) than 86.05% of its industry peers.
ROK has a debt to FCF ratio of 2.44. This is a good value and a sign of high solvency as ROK would need 2.44 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.44, ROK belongs to the top of the industry, outperforming 83.72% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for ROK, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
The current and quick ratio evaluation for ROK 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.

Looking at the Profitability

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, NYSE:ROK has achieved a 9:

ROK's Return On Assets of 12.22% is amongst the best of the industry. ROK outperforms 93.02% of its industry peers.
The Return On Equity of ROK (38.79%) is better than 96.51% of its industry peers.
ROK's Return On Invested Capital of 16.56% is amongst the best of the industry. ROK outperforms 94.19% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for ROK is above the industry average of 11.39%.
The last Return On Invested Capital (16.56%) for ROK is above the 3 year average (14.22%), which is a sign of increasing profitability.
ROK has a Profit Margin of 15.25%. This is amongst the best in the industry. ROK outperforms 93.02% of its industry peers.
ROK's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 17.80%, ROK belongs to the best of the industry, outperforming 91.86% of the companies in the same industry.
ROK's Gross Margin of 41.04% is amongst the best of the industry. ROK outperforms 91.86% of its industry peers.

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

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

Disclaimer

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.