Is NYSE:WSM suited for dividend investing?

Last update: Oct 15, 2024

WILLIAMS-SONOMA INC (NYSE:WSM) was identified as a stock worth exploring by dividend investors by our stock screener. NYSE:WSM 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.

Looking at the Dividend

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:

WSM's Dividend Yield is rather good when compared to the industry average which is at 2.99. WSM pays more dividend than 80.17% of the companies in the same industry.
On average, the dividend of WSM grows each year by 6.72%, which is quite nice.
WSM has paid a dividend for at least 10 years, which is a reliable track record.
WSM has not decreased their dividend for at least 10 years, which is a reliable track record.
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.

Health Assessment of NYSE:WSM

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:WSM has achieved a 8 out of 10:

An Altman-Z score of 6.76 indicates that WSM is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 6.76, WSM belongs to the best of the industry, outperforming 95.87% 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.
The Current ratio of WSM (1.56) is better than 61.98% of its industry peers.
The Quick ratio of WSM (0.85) is better than 68.59% 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.

Exploring NYSE:WSM's Profitability

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:WSM, the assigned 9 is noteworthy for profitability:

WSM's Return On Assets of 20.78% is amongst the best of the industry. WSM outperforms 97.52% of its industry peers.
WSM's Return On Equity of 48.14% is amongst the best of the industry. WSM outperforms 92.56% of its industry peers.
WSM has a better Return On Invested Capital (30.07%) than 96.69% of its industry peers.
WSM had an Average Return On Invested Capital over the past 3 years of 34.32%. This is significantly above the industry average of 12.30%.
The last Return On Invested Capital (30.07%) 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 has a Profit Margin of 14.29%. This is amongst the best in the industry. WSM outperforms 96.69% of its industry peers.
In the last couple of years the Profit Margin of WSM has grown nicely.
WSM has a better Operating Margin (18.29%) than 95.87% of its industry peers.
WSM's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 46.16%, WSM is doing good in the industry, outperforming 73.55% of the companies in the same industry.
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.

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.