RPM International Inc (NYSE:RPM): A Dividend Stock Analysis for Reliable Income

When looking for reliable dividend-paying stocks, investors often use screening methods that focus on companies with good dividend features and sound financial and profit conditions. This method helps find businesses able to maintain and possibly increase their dividend payments over the long term. One screening technique involves selecting stocks with good dividend ratings while setting minimum standards for profit and financial condition, which helps steer clear of companies that might have high yields but not the basic strength to support them.

Dividend Profile Assessment

RPM International Inc (NYSE:RPM) offers a good case for dividend-focused investors, receiving a ChartMill Dividend Rating of 7 out of 10. This rating shows the company's balanced method for shareholder returns and operational performance.

Key dividend features include:

• Current dividend yield of 2.11%, similar to the S&P 500 average
• Steady dividend growth with an annualized rise of 6.96% over recent years
• Dependable payment history lasting more than ten years without decreases
• Manageable payout ratio of 38.08% of earnings

The moderate payout ratio is especially important for dividend continuity, as it shows the company keeps enough earnings to invest back into business activities while rewarding shareholders. This balanced method lowers the chance of dividend cuts during economic slowdowns and helps continued dividend growth.

Profitability Foundation

Backing the dividend story is RPM's very good profitability, shown by a ChartMill Profitability Rating of 9. Strong profitability supplies the earnings base needed to maintain and increase dividend payments over time.

Notable profit measures:

• Return on equity of 22.45%, better than 91% of industry peers
• Profit margin of 9.12%, higher than 82% of competitors
• Operating margin of 12.09%, above industry median
• Steady positive earnings and cash flow over the past five years

These solid profit measures show RPM's ability to produce enough earnings to meet dividend commitments while financing future growth projects, a key mix for long-term dividend continuity.

Financial Health Considerations

RPM keeps sound financial health with a ChartMill Health Rating of 7, showing enough stability to handle economic cycles while continuing dividend payments.

Financial strength signs:

• Current ratio of 2.26, showing good short-term liquidity
• Altman-Z score of 3.87, well above bankruptcy worry levels
• Acceptable debt levels with debt-to-equity ratio of 0.87
• Steady share count decrease over recent years

The company's good balance sheet and cash position supply important safety margins during economic difficulties, reducing the probability of dividend pauses even during temporary business declines.

Growth and Valuation Context

While RPM's growth path shows some slowing, the company maintains positive earnings growth forecasts of 8.42% each year. The current valuation levels seem fair compared to both industry peers and wider market indexes, with a forward P/E ratio of 16.88 representing a value below the S&P 500 average.

The mix of fair valuation, expected earnings growth, and strong profitability creates a base for continued dividend dependability. Investors looking for dividend growth along with capital protection may find this balance attractive.

Additional Screening Opportunities

For investors wanting to research similar dividend options, the Best Dividend Stocks screen supplies regularly updated results using the same method that found RPM International. This screening process continues to find companies that meet the standards of good dividend features supported by healthy profit and financial basics.

For a full fundamental review of RPM International, including complete ratings across all evaluation areas, readers can view the full fundamental report.

Disclaimer: This analysis is based on current fundamental data and historical performance. It is not intended as investment advice. Investors should conduct their own research and consider their individual financial circumstances before making investment decisions. Past performance does not guarantee future results, and dividend payments are subject to company discretion and board approval.