Is TE CONNECTIVITY PLC (NYSE:TEL) suited for dividend investing?

Take a closer look at TE CONNECTIVITY PLC (NYSE:TEL), a stock of interest to dividend investors uncovered by our stock screener. TEL excels in fundamentals and provides a decent dividend, all while maintaining a reasonable valuation. Let's break it down further.

Dividend Assessment of TEL

ChartMill assigns a proprietary Dividend Rating to each stock. The score is computed by evaluating various valuation aspects, like the yield, the history, the dividend growth and sustainability. TEL was assigned a score of 7 for dividend:

• TEL's Dividend Yield is rather good when compared to the industry average which is at 2.37. TEL pays more dividend than 92.68% of the companies in the same industry.
• The dividend of TEL is nicely growing with an annual growth rate of 6.79%!
• TEL has been paying a dividend for at least 10 years, so it has a reliable track record.
• TEL has not decreased their dividend for at least 10 years, which is a reliable track record.
• TEL pays out 39.94% of its income as dividend. This is a sustainable payout ratio.

ChartMill's Evaluation of Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. TEL has earned a 8 out of 10:

• An Altman-Z score of 4.29 indicates that TEL is not in any danger for bankruptcy at the moment.
• The Altman-Z score of TEL (4.29) is better than 77.24% of its industry peers.
• TEL has a debt to FCF ratio of 1.45. This is a very positive value and a sign of high solvency as it would only need 1.45 years to pay back of all of its debts.
• With an excellent Debt to FCF ratio value of 1.45, TEL belongs to the best of the industry, outperforming 80.49% of the companies in the same industry.
• A Debt/Equity ratio of 0.26 indicates that TEL is not too dependend on debt financing.
• TEL does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Profitability Examination for TEL

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. TEL has earned a 8 out of 10:

• TEL's Return On Assets of 8.55% is amongst the best of the industry. TEL outperforms 89.43% of its industry peers.
• With an excellent Return On Equity value of 15.46%, TEL belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
• The Return On Invested Capital of TEL (14.02%) is better than 91.87% of its industry peers.
• TEL had an Average Return On Invested Capital over the past 3 years of 14.05%. This is significantly above the industry average of 8.85%.
• With an excellent Profit Margin value of 12.10%, TEL belongs to the best of the industry, outperforming 87.80% of the companies in the same industry.
• In the last couple of years the Profit Margin of TEL has grown nicely.
• The Operating Margin of TEL (18.93%) is better than 96.75% of its industry peers.
• TEL's Operating Margin has improved in the last couple of years.

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

Check the latest full fundamental report of TEL for a complete fundamental analysis.

Disclaimer

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.