Is CARTER'S INC (NYSE:CRI) suited for dividend investing?

CARTER'S INC (NYSE:CRI) was identified as a stock worth exploring by dividend investors by our stock screener. CRI 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.

Unpacking CRI's Dividend Rating

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. CRI scores a 7 out of 10:

• CRI has a Yearly Dividend Yield of 9.44%, which is a nice return.
• CRI's Dividend Yield is rather good when compared to the industry average which is at 4.09. CRI pays more dividend than 95.92% of the companies in the same industry.
• Compared to an average S&P500 Dividend Yield of 2.45, CRI pays a better dividend.
• The dividend of CRI is nicely growing with an annual growth rate of 16.75%!
• CRI has been paying a dividend for at least 10 years, so it has a reliable track record.

How do we evaluate the Health for CRI?

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. CRI has received a 7 out of 10:

• An Altman-Z score of 3.18 indicates that CRI is not in any danger for bankruptcy at the moment.
• CRI has a debt to FCF ratio of 2.05. This is a good value and a sign of high solvency as CRI would need 2.05 years to pay back of all of its debts.
• CRI has a better Debt to FCF ratio (2.05) than 75.51% of its industry peers.
• Even though the debt/equity ratio score it not favorable for CRI, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• A Current Ratio of 2.25 indicates that CRI has no problem at all paying its short term obligations.
• CRI has a Current ratio of 2.25. This is in the better half of the industry: CRI outperforms 67.35% of its industry peers.
• CRI's Quick ratio of 1.26 is fine compared to the rest of the industry. CRI outperforms 61.22% of its industry peers.

Profitability Analysis for CRI

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. CRI scores a 6 out of 10:

• With a decent Return On Assets value of 9.01%, CRI is doing good in the industry, outperforming 75.51% of the companies in the same industry.
• The Return On Equity of CRI (25.65%) is better than 79.59% of its industry peers.
• CRI has a Return On Invested Capital of 13.89%. This is in the better half of the industry: CRI outperforms 75.51% of its industry peers.
• The last Return On Invested Capital (13.89%) for CRI is above the 3 year average (13.75%), which is a sign of increasing profitability.
• CRI has a Profit Margin of 6.25%. This is in the better half of the industry: CRI outperforms 67.35% of its industry peers.
• Looking at the Operating Margin, with a value of 9.69%, CRI is in the better half of the industry, outperforming 67.35% of the companies in the same industry.
• CRI's Gross Margin has improved in the last couple of years.

Our Best Dividend screener lists more Best Dividend stocks and is updated daily.

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

Disclaimer

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.