Why NYSE:WSM qualifies as a good dividend investing stock.

WILLIAMS-SONOMA INC (NYSE:WSM) has caught the attention of dividend investors as a stock worth considering. NYSE:WSM excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

ChartMill's Evaluation of Dividend

To gauge a stock's dividend quality, ChartMill utilizes a Dividend Rating ranging from 0 to 10. This comprehensive assessment considers various dividend aspects, including yield, history, growth, and sustainability. NYSE:WSM has achieved a 7 out of 10:

• Compared to an average industry Dividend Yield of 3.08, WSM pays a bit more dividend than its industry peers.
• On average, the dividend of WSM grows each year by 6.72%, which is quite nice.
• 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.
• 24.36% of the earnings are spent on dividend by WSM. This is a low number and sustainable payout ratio.
• WSM's earnings are growing more than its dividend. This makes the dividend growth sustainable.

Assessing Health for NYSE:WSM

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:

• WSM has an Altman-Z score of 7.23. This indicates that WSM is financially healthy and has little risk of bankruptcy at the moment.
• WSM's Altman-Z score of 7.23 is amongst the best of the industry. WSM outperforms 95.04% 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 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.

How do we evaluate the Profitability for NYSE:WSM?

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NYSE:WSM scores a 9 out of 10:

• WSM's Return On Assets of 22.04% is amongst the best of the industry. WSM outperforms 99.17% of its industry peers.
• Looking at the Return On Equity, with a value of 57.42%, WSM belongs to the top of the industry, outperforming 95.04% of the companies in the same industry.
• With an excellent Return On Invested Capital value of 33.38%, WSM belongs to the best of the industry, outperforming 97.52% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for WSM is significantly above the industry average of 12.31%.
• WSM's Profit Margin of 14.54% is amongst the best of the industry. WSM outperforms 98.35% of its industry peers.
• WSM's Profit Margin has improved in the last couple of years.
• Looking at the Operating Margin, with a value of 18.50%, WSM belongs to the top of the industry, outperforming 95.87% of the companies in the same industry.
• WSM's Operating Margin has improved in the last couple of years.
• WSM has a Gross Margin of 46.75%. This is in the better half of the industry: WSM outperforms 75.21% 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.

Our latest full fundamental report of WSM contains the most current fundamental analsysis.

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.