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

Last update: Aug 12, 2024

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

What does the Dividend looks like for NYSE:WSM

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. NYSE:WSM has been assigned a 7 for dividend:

WSM's Dividend Yield is a higher than the industry average which is at 3.84.
The dividend of WSM is nicely growing with an annual growth rate of 6.72%!
WSM has been paying a dividend for at least 10 years, so it has a reliable track record.
WSM has not decreased their dividend for at least 10 years, which is a reliable track record.
WSM pays out 22.40% of its income as dividend. This is a sustainable payout ratio.
WSM's earnings are growing more than its dividend. This makes the dividend growth sustainable.

How do we evaluate the Health for NYSE:WSM?

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:WSM has earned a 8 out of 10:

WSM has an Altman-Z score of 6.73. This indicates that WSM is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.73, WSM belongs to the top of the industry, outperforming 96.00% of the companies in the same industry.
WSM has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
Looking at the Quick ratio, with a value of 0.85, WSM is in the better half of the industry, outperforming 67.20% of the companies in the same industry.
WSM 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.

Profitability Examination for NYSE:WSM

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:WSM, the assigned 9 is a significant indicator of profitability:

WSM has a Return On Assets of 20.52%. This is amongst the best in the industry. WSM outperforms 97.60% of its industry peers.
Looking at the Return On Equity, with a value of 47.92%, WSM belongs to the top of the industry, outperforming 92.00% of the companies in the same industry.
WSM has a better Return On Invested Capital (29.79%) than 96.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for WSM is significantly above the industry average of 13.00%.
The last Return On Invested Capital (29.79%) for WSM is well below the 3 year average (34.32%), which needs to be investigated, but indicates that WSM had better years and this may not be a problem.
WSM's Profit Margin of 13.83% is amongst the best of the industry. WSM outperforms 96.80% of its industry peers.
WSM's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 17.88%, WSM belongs to the best of the industry, outperforming 95.20% of the companies in the same industry.
WSM's Operating Margin has improved in the last couple of years.
WSM's Gross Margin of 44.82% is fine compared to the rest of the industry. WSM outperforms 70.40% of its industry peers.
WSM's Gross Margin has improved in the last couple of years.

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

Our latest full fundamental report of WSM 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.