Uncovering Dividend Opportunities with NETAPP INC (NASDAQ:NTAP).

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

Deciphering NTAP's Dividend Rating

ChartMill assigns a Dividend Rating to every stock. This score ranges from 0 to 10 and evaluates the different dividend aspects, including the yield, the growth and sustainability. NTAP scores a 7 out of 10:

• NTAP's Dividend Yield is rather good when compared to the industry average which is at 3.76. NTAP pays more dividend than 81.25% of the companies in the same industry.
• NTAP has been paying a dividend for at least 10 years, so it has a reliable track record.
• NTAP has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 37.20% of the earnings are spent on dividend by NTAP. This is a low number and sustainable payout ratio.
• NTAP's earnings are growing more than its dividend. This makes the dividend growth sustainable.

How do we evaluate the Health for NTAP?

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 NTAP, the assigned 5 reflects its health status:

• NTAP has a Altman-Z score of 2.45. This is in the better half of the industry: NTAP outperforms 68.75% of its industry peers.
• The Debt to FCF ratio of NTAP is 1.58, which is an excellent value as it means it would take NTAP, only 1.58 years of fcf income to pay off all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.58, NTAP belongs to the top of the industry, outperforming 90.63% of the companies in the same industry.
• Even though the debt/equity ratio score it not favorable for NTAP, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.

Profitability Analysis for NTAP

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, NTAP has achieved a 8:

• Looking at the Return On Assets, with a value of 12.65%, NTAP belongs to the top of the industry, outperforming 87.50% of the companies in the same industry.
• With an excellent Return On Equity value of 114.27%, NTAP belongs to the best of the industry, outperforming 96.88% of the companies in the same industry.
• The Return On Invested Capital of NTAP (22.77%) is better than 87.50% of its industry peers.
• The last Return On Invested Capital (22.77%) for NTAP is above the 3 year average (15.62%), which is a sign of increasing profitability.
• NTAP's Profit Margin of 17.47% is amongst the best of the industry. NTAP outperforms 93.75% of its industry peers.
• NTAP's Operating Margin of 21.48% is amongst the best of the industry. NTAP outperforms 90.63% of its industry peers.
• NTAP has a Gross Margin of 70.62%. This is amongst the best in the industry. NTAP outperforms 100.00% of its industry peers.
• NTAP's Gross Margin has improved in the last couple of years.

More Best Dividend stocks can be found in our Best Dividend screener.

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

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.