JACK HENRY & ASSOCIATES INC (NASDAQ:JKHY): A Top Dividend Stock for Reliable Income

For investors looking for reliable income, dividend investing is a key method, especially when centered on companies that join consistent payouts with solid core business traits. The process used here applies a multi-factor screening method that favors stocks with high ChartMill Dividend Ratings while checking for sufficient earnings and financial soundness. This three-part check aids in finding companies not only providing good yields, but those with the business might and balance sheet strength to keep and possibly raise their dividends in the future.

JACK HENRY & ASSOCIATES INC (NASDAQ:JKHY) appears as a strong option within this structure, displaying several traits that dividend investors will likely see as positive. A closer inspection of the company’s fundamental details, especially its detailed fundamental analysis report, shows why it achieves high marks across the chosen measures.

Dividend Reliability and Growth
A main part of dividend investing is the sustainability and direction of the payment. JKHY’s dividend status is solid, marked by a dependable history and a positive forward view. The company has reliably paid and raised its dividend for more than ten years, creating a history of dedication to shareholders. Its yearly dividend growth rate of about 6.8% over the last five years shows a management group focused on gradually returning more capital to owners, an important feature for a long-term income portfolio. Importantly, this growth is supported by earnings that are rising more quickly, confirming the dividend raises are backed by real business growth instead of being paid for by debt or a reducing amount of kept earnings. The payout ratio is at a very workable 37.9% of income, offering a wide safety margin and showing that the present dividend is very safe even if earnings meet short-term challenges.

Profitability: The Source for Distributions
A company’s capacity to produce earnings is the source that pays for all shareholder returns, making high profitability a required filter in this approach. JKHY does very well here, receiving a high ChartMill Profitability Rating. Its return on equity (ROE) of 21.08% and return on invested capital (ROIC) of 16.66% are not just good on their own but are some of the top in its financial services industry group, doing better than over 85% and 93% of rivals, in that order. These measures point to very effective use of shareholder capital. Also, high and getting better profit margins, with an operating margin over 23%, show pricing ability and operational effectiveness, which are necessary for reliably financing dividend payments.

Financial Health: Guaranteeing Long-Term Sustainability
The third vital filter, financial health, is what divides temporary high-yielders from lasting dividend payers. JKHY’s balance sheet is a clear advantage. The company functions with almost no debt, an uncommon and cautious position that puts it in the top group of its industry for financial steadiness. This absence of leverage means the company is not weighed down by interest payments, releasing more cash for operations and shareholder returns. Its Altman-Z score, a main sign of bankruptcy risk, is a very high 11.0, pointing to outstanding solvency. This pairing of high liquidity and little debt gives a strong shield against economic declines, ensuring the company can easily maintain its dividend through different market periods.

For investors curious to review other companies that fit this strict mix of high dividend quality, strong profitability, and good financial health, the fully set up Best Dividend Stocks screen offers a changing beginning point for more study.

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Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation to buy, sell, or hold any security, or an endorsement of any investment strategy. All investments involve risk, including the possible loss of principal. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.