BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) was identified as a high-quality dividend stock by our screening process. The company combines a solid dividend profile with strong profitability and reasonable financial health, making it an interesting candidate for income-focused investors.
Dividend Strength
Attractive Yield: BAH offers a dividend yield of 2.04%, slightly above the industry average of 2.06%. While not the highest yield available, it remains competitive within its sector.
Consistent 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.
Reliable Track Record: BAH has paid dividends for at least 10 consecutive years without reductions, a sign of stability.
Sustainable Payout Ratio: With a payout ratio of 24.48%, the company retains sufficient earnings to reinvest in growth while maintaining dividend payments.
Profitability & Financial Health
High Returns: BAH generates strong profitability metrics, including a Return on Equity (ROE) of 109.13% and a Return on Invested Capital (ROIC) of 20.59%, both well above industry averages.
Improving Margins: Operating margins have expanded to 10.21%, reflecting efficient cost management.
Moderate Financial Health: While the company carries a higher debt-to-equity ratio (3.90), its Altman-Z score of 4.82 indicates low bankruptcy risk, and liquidity ratios remain healthy.
Valuation & Growth
Reasonable Valuation: Trading at a P/E of 16.84, BAH appears fairly valued compared to peers and slightly cheaper than the S&P 500 average.
Steady Revenue Growth: Revenue has grown at 9.93% annually over the past five years, supported by strong government and commercial contracts.
This is not investment advice. The observations here are based on available data at the time of writing. Always conduct your own research before making investment decisions.
BOOZ ALLEN HAMILTON HOLDINGS (NYSE:BAH) offers a reliable dividend with strong profitability and reasonable valuation, making it a solid choice for income investors.