NETAPP INC (NASDAQ:NTAP) – A Reliable Dividend Stock with Strong Profitability

NETAPP INC (NASDAQ:NTAP) was identified by our Best Dividend Stocks screen as a candidate for dividend investors. The company combines a solid dividend profile with strong profitability, making it an interesting option for those seeking income-generating investments.

Dividend Strength

• Dividend Yield: NTAP offers a yield of 1.94%, slightly above the industry average of 1.92%.
• Dividend Growth: While the annual dividend growth rate is modest at 1.72%, the company has maintained payouts for over 10 years without reductions.
• Payout Ratio: Only 35.75% of earnings are allocated to dividends, indicating sustainability and room for future increases.

Profitability Highlights

• High Margins: NTAP boasts a Profit Margin of 18.05% and an Operating Margin of 21.68%, outperforming most peers.
• Strong Returns: The company delivers a Return on Equity (ROE) of 114.04% and a Return on Invested Capital (ROIC) of 18.95%, reflecting efficient capital use.

Financial Health Considerations

• Debt Levels: NTAP has a Debt-to-Equity ratio of 2.39, which is higher than ideal but offset by strong cash flow coverage.
• Liquidity: The Current Ratio of 1.26 and Quick Ratio of 1.22 suggest adequate short-term financial flexibility.

Valuation

NTAP trades at a P/E ratio of 14.75, below both the S&P 500 average (27.45) and many industry peers, making it reasonably priced relative to earnings.

For a deeper look, review the full fundamental report on NTAP.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.