Why NYSE:WSM is a Top Pick for Dividend Investors.

Last update: Sep 2, 2024

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

Evaluating Dividend: NYSE:WSM

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NYSE:WSM has received a 7 out of 10:

Compared to an average industry Dividend Yield of 3.79, WSM pays a bit more dividend than its industry peers.
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
WSM pays out 23.23% 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.

Unpacking NYSE:WSM's Health Rating

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NYSE:WSM, the assigned 8 for health provides valuable insights:

An Altman-Z score of 6.52 indicates that WSM is not in any danger for bankruptcy at the moment.
WSM has a better Altman-Z score (6.52) than 95.08% of its industry peers.
There is no outstanding debt for WSM. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
WSM's Quick ratio of 0.85 is fine compared to the rest of the industry. WSM outperforms 69.67% of its industry peers.
The current and quick ratio evaluation for WSM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Insights: NYSE:WSM

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:WSM was assigned a score of 9 for profitability:

With an excellent Return On Assets value of 20.78%, WSM belongs to the best of the industry, outperforming 97.54% of the companies in the same industry.
WSM has a Return On Equity of 48.14%. This is amongst the best in the industry. WSM outperforms 91.80% of its industry peers.
The Return On Invested Capital of WSM (30.07%) is better than 95.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WSM is significantly above the industry average of 12.45%.
The 3 year average ROIC (34.32%) for WSM is well above the current ROIC(30.07%). The reason for the recent decline needs to be investigated.
WSM's Profit Margin of 14.29% is amongst the best of the industry. WSM outperforms 96.72% of its industry peers.
WSM's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 18.29%, WSM belongs to the best of the industry, outperforming 95.90% of the companies in the same industry.
In the last couple of years the Operating Margin of WSM has grown nicely.
The Gross Margin of WSM (46.16%) is better than 72.95% of its industry peers.
In the last couple of years the Gross Margin of WSM has grown nicely.

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 WSM

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.