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

By Mill Chart

Last update: Mar 18, 2024

Our stock screener has singled out MICROCHIP TECHNOLOGY INC (NASDAQ:MCHP) as a promising choice for dividend investors. NASDAQ:MCHP not only scores well in profitability, solvency, and liquidity but also offers a decent dividend. We'll explore this further.

Evaluating Dividend: NASDAQ:MCHP

ChartMill provides a Dividend Rating for every stock, ranging from 0 to 10. This rating assesses various dividend aspects, including yield, growth, and sustainability. NASDAQ:MCHP earns a 7 out of 10:

  • Compared to an average industry Dividend Yield of 2.02, MCHP pays a better dividend. On top of this MCHP pays more dividend than 92.45% of the companies listed in the same industry.
  • On average, the dividend of MCHP grows each year by 11.69%, which is quite nice.
  • MCHP has paid a dividend for at least 10 years, which is a reliable track record.
  • MCHP has not decreased their dividend for at least 10 years, which is a reliable track record.
  • MCHP pays out 36.71% of its income as dividend. This is a sustainable payout ratio.

Evaluating Health: NASDAQ:MCHP

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:MCHP has earned a 5 out of 10:

  • An Altman-Z score of 4.94 indicates that MCHP is not in any danger for bankruptcy at the moment.
  • The Debt to FCF ratio of MCHP is 2.02, which is a good value as it means it would take MCHP, 2.02 years of fcf income to pay off all of its debts.
  • With a decent Debt to FCF ratio value of 2.02, MCHP is doing good in the industry, outperforming 66.98% of the companies in the same industry.
  • Even though the debt/equity ratio score it not favorable for MCHP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Understanding NASDAQ:MCHP's Profitability

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:MCHP has achieved a 9:

  • Looking at the Return On Assets, with a value of 14.60%, MCHP belongs to the top of the industry, outperforming 83.02% of the companies in the same industry.
  • Looking at the Return On Equity, with a value of 33.28%, MCHP belongs to the top of the industry, outperforming 90.57% of the companies in the same industry.
  • MCHP has a Return On Invested Capital of 20.20%. This is amongst the best in the industry. MCHP outperforms 90.57% of its industry peers.
  • The last Return On Invested Capital (20.20%) for MCHP is above the 3 year average (11.80%), which is a sign of increasing profitability.
  • MCHP has a Profit Margin of 27.59%. This is amongst the best in the industry. MCHP outperforms 89.62% of its industry peers.
  • In the last couple of years the Profit Margin of MCHP has grown nicely.
  • The Operating Margin of MCHP (37.14%) is better than 93.40% of its industry peers.
  • In the last couple of years the Operating Margin of MCHP has grown nicely.
  • MCHP has a better Gross Margin (67.03%) than 88.68% of its industry peers.
  • MCHP's Gross Margin has improved in the last couple of years.

Every day, new Best Dividend stocks can be found on ChartMill in our Best Dividend screener.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.

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MICROCHIP TECHNOLOGY INC

NASDAQ:MCHP (5/24/2024, 7:00:00 PM)

After market: 98.19 -0.04 (-0.04%)

98.23

+0.09 (+0.09%)

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