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

Take a closer look at TE CONNECTIVITY LTD (NYSE:TEL), a stock of interest to dividend investors uncovered by our stock screener. NYSE:TEL excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

How do we evaluate the Dividend for NYSE:TEL?

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:TEL scores a 7 out of 10:

• Compared to an average industry Dividend Yield of 1.75, TEL pays a better dividend. On top of this TEL pays more dividend than 92.86% of the companies listed in the same industry.
• On average, the dividend of TEL grows each year by 6.41%, which is quite nice.
• TEL has been paying a dividend for at least 10 years, so it has a reliable track record.
• TEL has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 21.47% of the earnings are spent on dividend by TEL. This is a low number and sustainable payout ratio.
• TEL's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Health Analysis for NYSE:TEL

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. NYSE:TEL has received a 6 out of 10:

• TEL has an Altman-Z score of 4.56. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
• With a decent Altman-Z score value of 4.56, TEL is doing good in the industry, outperforming 78.57% of the companies in the same industry.
• TEL has a debt to FCF ratio of 1.57. This is a very positive value and a sign of high solvency as it would only need 1.57 years to pay back of all of its debts.
• TEL has a better Debt to FCF ratio (1.57) than 74.60% of its industry peers.
• TEL has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.

Profitability Examination for NYSE:TEL

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. NYSE:TEL was assigned a score of 7 for profitability:

• The Return On Assets of TEL (15.00%) is better than 98.41% of its industry peers.
• With an excellent Return On Equity value of 27.50%, TEL belongs to the best of the industry, outperforming 96.83% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 13.95%, TEL belongs to the best of the industry, outperforming 89.68% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for TEL is above the industry average of 9.42%.
• The Profit Margin of TEL (21.63%) is better than 98.41% of its industry peers.
• The Operating Margin of TEL (18.02%) is better than 95.24% of its industry peers.

More Best Dividend stocks can be found in our Best Dividend screener.

Check the latest full fundamental report of TEL for a complete fundamental analysis.

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.