Analyzing NASDAQ:MCHP's Dividend Potential.

Last update: Apr 29, 2024

Consider MICROCHIP TECHNOLOGY INC (NASDAQ:MCHP) as a top pick for dividend investors, identified by our stock screening tool. NASDAQ:MCHP shines in terms of profitability, solvency, and liquidity, all while paying a decent dividend. Let's dive deeper into the analysis.

Dividend Examination for NASDAQ:MCHP

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:MCHP has received a 7 out of 10:

MCHP's Dividend Yield is rather good when compared to the industry average which is at 2.07. MCHP pays more dividend than 90.57% of the companies in the same industry.
On average, the dividend of MCHP grows each year by 11.69%, which is quite nice.
MCHP has been paying a dividend for at least 10 years, so it has a reliable track record.
MCHP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
36.71% of the earnings are spent on dividend by MCHP. This is a low number and sustainable payout ratio.

A Closer Look at Health for 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 4 out of 10:

An Altman-Z score of 5.11 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.
Looking at the Debt to FCF ratio, with a value of 2.02, MCHP is in the better half of the industry, outperforming 69.81% 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.

Evaluating Profitability: NASDAQ:MCHP

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:MCHP has earned a 9 out of 10:

MCHP's Return On Assets of 14.60% is amongst the best of the industry. MCHP outperforms 84.91% of its industry peers.
MCHP's Return On Equity of 33.28% is amongst the best of the industry. MCHP outperforms 92.45% of its industry peers.
The Return On Invested Capital of MCHP (20.20%) is better than 92.45% of its industry peers.
The 3 year average ROIC (11.80%) for MCHP is below the current ROIC(20.20%), indicating increased profibility in the last year.
MCHP has a better Profit Margin (27.59%) than 89.62% of its industry peers.
MCHP's Profit Margin has improved in the last couple of years.
MCHP has a Operating Margin of 37.14%. This is amongst the best in the industry. MCHP outperforms 93.40% of its industry peers.
In the last couple of years the Operating Margin of MCHP has grown nicely.
MCHP's Gross Margin of 67.03% is amongst the best of the industry. MCHP outperforms 87.74% of its industry peers.
In the last couple of years the Gross Margin of MCHP has grown nicely.

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

For an up to date full fundamental analysis you can check the fundamental report of MCHP

Keep in mind

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.