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

Last update: Jan 2, 2025

Our stock screening tool has identified TE CONNECTIVITY PLC (NYSE:TEL) as a strong dividend contender with robust fundamentals. NYSE:TEL exhibits commendable financial health and profitability, all while offering a sustainable dividend. Let's delve into each aspect below.

Dividend Assessment of NYSE:TEL

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:TEL has been awarded a 7 for its dividend quality:

Compared to an average industry Dividend Yield of 1.83, TEL pays a better dividend. On top of this TEL pays more dividend than 93.39% of the companies listed in the same industry.
The dividend of TEL is nicely growing with an annual growth rate of 6.79%!
TEL has paid a dividend for at least 10 years, which is 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.
23.80% 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

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 7 out of 10:

TEL has an Altman-Z score of 4.61. This indicates that TEL is financially healthy and has little risk of bankruptcy at the moment.
TEL's Altman-Z score of 4.61 is fine compared to the rest of the industry. TEL outperforms 69.42% of its industry peers.
TEL has a debt to FCF ratio of 1.50. This is a very positive value and a sign of high solvency as it would only need 1.50 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.50, TEL is in the better half of the industry, outperforming 78.51% of the companies in the same industry.
A Debt/Equity ratio of 0.27 indicates that TEL is not too dependend on debt financing.
TEL does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

A Closer Look at Profitability for NYSE:TEL

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:TEL, the assigned 8 is noteworthy for profitability:

With an excellent Return On Assets value of 13.97%, TEL belongs to the best of the industry, outperforming 94.21% of the companies in the same industry.
With an excellent Return On Equity value of 25.84%, TEL belongs to the best of the industry, outperforming 94.21% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 13.83%, TEL belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
TEL had an Average Return On Invested Capital over the past 3 years of 14.05%. This is above the industry average of 9.20%.
TEL's Profit Margin of 20.15% is amongst the best of the industry. TEL outperforms 95.87% of its industry peers.
TEL's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 18.83%, TEL belongs to the best of the industry, outperforming 97.52% of the companies in the same industry.
TEL's Operating Margin has improved in the last couple of years.

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

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.