EATON CORP PLC (NYSE:ETN) – A Reliable Dividend Stock with Strong Fundamentals

EATON CORP PLC (NYSE:ETN) stands out as a strong candidate for dividend investors, according to our screening criteria. The company combines a solid dividend profile with healthy profitability and financial stability, making it an appealing option for income-focused portfolios.

Dividend Strength

ETN earns a Dividend Rating of 7, reflecting its reliable payout history and sustainable yield. Key highlights include:

• Dividend Yield of 1.27%: While modest, it outperforms 89% of peers in the Electrical Equipment industry.
• 10+ Years of Consistent Payments: ETN has maintained dividends without cuts for over a decade.
• Sustainable Payout Ratio (38.84%): Earnings comfortably cover dividends, reducing risk of future reductions.
• Steady Growth: Dividends have grown at an annualized rate of 5.7%, supported by rising earnings.

Profitability and Financial Health

Beyond dividends, ETN excels in profitability and financial strength:

• Profitability Rating of 9: Strong margins (15.55% net, 19.27% operating) and high returns (ROIC of 13.39%) highlight efficient operations.
• Health Rating of 7: A manageable debt-to-equity ratio (0.45) and solid solvency metrics (Altman-Z score of 5.25) indicate financial resilience.

Valuation and Growth

ETN trades at a P/E of 29.11, slightly above the S&P 500 average but below many industry peers. Future EPS growth is projected at 14.1% annually, suggesting dividends could continue rising.

For a deeper look, review the full fundamental analysis of ETN.

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Disclaimer

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