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

Our stock screening tool has identified SKYWORKS SOLUTIONS INC (NASDAQ:SWKS) as a strong dividend contender with robust fundamentals. NASDAQ:SWKS exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

How do we evaluate the Dividend for NASDAQ:SWKS?

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:SWKS has been assigned a 7 for dividend:

• SWKS's Dividend Yield is rather good when compared to the industry average which is at 2.21. SWKS pays more dividend than 93.52% of the companies in the same industry.
• SWKS's Dividend Yield is rather good when compared to the S&P500 average which is at 2.21.
• The dividend of SWKS is nicely growing with an annual growth rate of 13.44%!
• SWKS has paid a dividend for at least 10 years, which is a reliable track record.
• SWKS's earnings are growing more than its dividend. This makes the dividend growth sustainable.

ChartMill's Evaluation of Health

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:SWKS has received a 8 out of 10:

• An Altman-Z score of 6.69 indicates that SWKS is not in any danger for bankruptcy at the moment.
• SWKS has a better Altman-Z score (6.69) than 68.52% of its industry peers.
• The Debt to FCF ratio of SWKS is 0.64, which is an excellent value as it means it would take SWKS, only 0.64 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 0.64, SWKS belongs to the best of the industry, outperforming 81.48% of the companies in the same industry.
• A Debt/Equity ratio of 0.16 indicates that SWKS is not too dependend on debt financing.
• A Current Ratio of 5.75 indicates that SWKS has no problem at all paying its short term obligations.
• SWKS's Current ratio of 5.75 is amongst the best of the industry. SWKS outperforms 83.33% of its industry peers.
• A Quick Ratio of 4.29 indicates that SWKS has no problem at all paying its short term obligations.
• The Quick ratio of SWKS (4.29) is better than 78.70% of its industry peers.

Profitability Analysis for NASDAQ:SWKS

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:SWKS was assigned a score of 6 for profitability:

• SWKS has a Return On Assets of 9.47%. This is in the better half of the industry: SWKS outperforms 75.00% of its industry peers.
• The Return On Equity of SWKS (12.31%) is better than 71.30% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 9.83%, SWKS is in the better half of the industry, outperforming 78.70% of the companies in the same industry.
• SWKS had an Average Return On Invested Capital over the past 3 years of 16.64%. This is significantly above the industry average of 11.09%.
• The 3 year average ROIC (16.64%) for SWKS is well above the current ROIC(9.83%). The reason for the recent decline needs to be investigated.
• The Profit Margin of SWKS (17.85%) is better than 74.07% of its industry peers.
• SWKS has a better Operating Margin (19.44%) than 76.85% of its industry peers.

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

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

Keep in mind

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.