Why NASDAQ:KLAC qualifies as a good dividend investing stock.

KLA CORP (NASDAQ:KLAC) has caught the attention of dividend investors as a stock worth considering. NASDAQ:KLAC excels in profitability, solvency, and liquidity, all while providing a decent dividend. Let's delve into the details.

Dividend Assessment of NASDAQ:KLAC

An integral part of ChartMill's stock analysis is the Dividend Rating, which spans from 0 to 10. This rating evaluates diverse dividend factors, including yield, historical data, growth, and sustainability. NASDAQ:KLAC has received a 7 out of 10:

• Compared to an average industry Dividend Yield of 2.21, KLAC pays a better dividend. On top of this KLAC pays more dividend than 80.56% of the companies listed in the same industry.
• On average, the dividend of KLAC grows each year by 13.33%, which is quite nice.
• KLAC has paid a dividend for at least 10 years, which is a reliable track record.
• KLAC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• KLAC pays out 26.62% of its income as dividend. This is a sustainable payout ratio.

Health Assessment of NASDAQ:KLAC

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:KLAC, the assigned 6 reflects its health status:

• KLAC has an Altman-Z score of 6.38. This indicates that KLAC is financially healthy and has little risk of bankruptcy at the moment.
• KLAC has a better Altman-Z score (6.38) than 64.81% of its industry peers.
• KLAC has a debt to FCF ratio of 2.10. This is a good value and a sign of high solvency as KLAC would need 2.10 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 2.10, KLAC is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
• Although KLAC does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• A Current Ratio of 2.13 indicates that KLAC has no problem at all paying its short term obligations.

Assessing Profitability for NASDAQ:KLAC

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:KLAC has achieved a 9:

• KLAC has a better Return On Assets (18.92%) than 93.52% of its industry peers.
• Looking at the Return On Equity, with a value of 83.33%, KLAC belongs to the top of the industry, outperforming 99.07% of the companies in the same industry.
• KLAC's Return On Invested Capital of 32.68% is amongst the best of the industry. KLAC outperforms 99.07% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for KLAC is significantly above the industry average of 11.25%.
• KLAC has a better Profit Margin (28.92%) than 90.74% of its industry peers.
• KLAC's Profit Margin has improved in the last couple of years.
• KLAC has a better Operating Margin (39.41%) than 97.22% of its industry peers.
• KLAC's Operating Margin has improved in the last couple of years.
• KLAC's Gross Margin of 61.56% is amongst the best of the industry. KLAC outperforms 87.04% of its industry peers.

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

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

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.