BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) - A Reliable Dividend Stock With Strong Fundamentals

BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) was identified by our dividend stock screener as a company with a strong dividend profile, solid profitability, and reasonable financial health. The stock stands out for its consistent dividend growth and sustainable payout ratio, making it an appealing choice for income-focused investors.

Dividend Strength

• Attractive Yield: BAH offers a dividend yield of 2.16%, slightly above the industry average of 2.14%. While not the highest yield available, it provides a stable income stream.
• Reliable Growth: The company has increased its dividend at an annualized rate of 14.89% over the past five years, demonstrating a commitment to rewarding shareholders.
• Long Track Record: BAH has paid dividends for at least 10 years without any reductions, indicating a dependable payout history.
• Sustainable Payout: With a payout ratio of 24.48%, the dividend is well-covered by earnings, reducing the risk of cuts even in weaker economic conditions.

Profitability & Financial Health

• Strong Profit Margins: BAH maintains a profit margin of 7.34%, outperforming 74% of its industry peers. Its operating margin (10.21%) is also above average.
• High Return on Equity: The company delivers an impressive ROE of 109.13%, placing it in the top 5% of its sector.
• Solid Liquidity: A current ratio of 1.79 suggests BAH can comfortably meet short-term obligations. However, its elevated debt-to-equity ratio (3.90) warrants monitoring.

Valuation

BAH trades at a P/E ratio of 15.74, slightly below the industry average (19.28) and significantly lower than the S&P 500 (26.34). This suggests the stock is reasonably priced relative to earnings.

For a deeper dive into BAH’s financials, review the full fundamental report.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.