Is NYSE:TEL a Good Fit for Dividend Investing?

TE CONNECTIVITY LTD (NYSE:TEL) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:TEL scores well on profitability, solvency and liquidity. At the same time it seems to pay a decent dividend. We'll explore this a bit deeper below.

Understanding NYSE:TEL's Dividend Score

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.
• The dividend of TEL is nicely growing with an annual growth rate of 6.41%!
• TEL has been paying a dividend for at least 10 years, so it has a reliable track record.
• TEL has not decreased their dividend for at least 10 years, which is a reliable track record.
• 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.

ChartMill's Evaluation of Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NYSE:TEL has earned a 6 out of 10:

• An Altman-Z score of 4.68 indicates that TEL is not in any danger for bankruptcy at the moment.
• TEL's Altman-Z score of 4.68 is fine compared to the rest of the industry. TEL outperforms 75.40% of its industry peers.
• 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 Debt to FCF ratio of 1.57. This is in the better half of the industry: TEL outperforms 73.81% of its industry peers.
• A Debt/Equity ratio of 0.24 indicates that TEL is not too dependend on debt financing.

Exploring NYSE:TEL's Profitability

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:

• TEL has a Return On Assets of 15.00%. This is amongst the best in the industry. TEL outperforms 96.83% of its industry peers.
• TEL has a better Return On Equity (27.50%) than 95.24% of its industry peers.
• TEL has a better Return On Invested Capital (13.95%) than 89.68% of its industry peers.
• TEL had an Average Return On Invested Capital over the past 3 years of 14.34%. This is significantly above the industry average of 9.11%.
• Looking at the Profit Margin, with a value of 21.63%, TEL belongs to the top of the industry, outperforming 98.41% of the companies in the same industry.
• Looking at the Operating Margin, with a value of 18.02%, TEL belongs to the top of the industry, outperforming 96.03% of the companies in the same industry.

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

For an up to date full fundamental analysis you can check the fundamental report of TEL

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.