Why NYSE:STE provides a good dividend, while having solid fundamentals.

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

Understanding NYSE:STE's Dividend Score

ChartMill assigns a Dividend Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing various dividend elements, such as yield, historical performance, dividend growth, and sustainability. NYSE:STE has been awarded a 6 for its dividend quality:

• STE's Dividend Yield is rather good when compared to the industry average which is at 1.67. STE pays more dividend than 94.27% of the companies in the same industry.
• On average, the dividend of STE grows each year by 8.78%, which is quite nice.
• STE has paid a dividend for at least 10 years, which is a reliable track record.
• STE has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
• 34.54% of the earnings are spent on dividend by STE. This is a low number and sustainable payout ratio.

Exploring NYSE:STE's Health

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NYSE:STE was assigned a score of 5 for health:

• STE has an Altman-Z score of 3.60. This indicates that STE is financially healthy and has little risk of bankruptcy at the moment.
• STE has a Altman-Z score of 3.60. This is in the better half of the industry: STE outperforms 71.35% of its industry peers.
• STE has a better Debt to FCF ratio (5.57) than 80.21% of its industry peers.
• STE has a Current Ratio of 2.43. This indicates that STE is financially healthy and has no problem in meeting its short term obligations.

Profitability Assessment of NYSE:STE

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:STE, the assigned 7 is noteworthy for profitability:

• Looking at the Return On Assets, with a value of 4.96%, STE belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
• With an excellent Return On Equity value of 8.84%, STE belongs to the best of the industry, outperforming 84.38% of the companies in the same industry.
• STE has a better Return On Invested Capital (5.82%) than 80.73% of its industry peers.
• The last Return On Invested Capital (5.82%) for STE is above the 3 year average (5.06%), which is a sign of increasing profitability.
• STE has a Profit Margin of 10.48%. This is amongst the best in the industry. STE outperforms 85.94% of its industry peers.
• STE's Operating Margin of 15.66% is amongst the best of the industry. STE outperforms 86.98% of its industry peers.

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

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

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.