TE CONNECTIVITY PLC (NYSE:TEL) – A Reliable Dividend Stock with Strong Fundamentals

TE CONNECTIVITY PLC (NYSE:TEL) stands out as a compelling choice for dividend investors, according to our Best Dividend Stocks screen. The company combines a solid dividend track record with strong profitability and reasonable financial health, making it a well-rounded candidate for income-focused portfolios.

Dividend Strength

• Consistent Payouts: TEL has paid dividends for at least 10 years without reductions, demonstrating reliability.
• Growing Dividends: The company has increased its dividend at an annual rate of 6.79%, outpacing inflation.
• Sustainable Yield: With a 1.68% dividend yield, TEL offers a competitive payout compared to its industry peers, outperforming 91.2% of companies in the electronic equipment sector.
• Payout Ratio: At 55.9%, the dividend is well-covered by earnings, though investors should monitor this ratio for sustainability.

Profitability Highlights

• Strong Margins: TEL boasts an Operating Margin of 19.14%, ranking in the top 2.4% of its industry.
• High ROIC: The company’s Return on Invested Capital (14.59%) indicates efficient use of capital, outperforming 92% of peers.
• Earnings Growth: EPS has grown 9.1% over the past year, with expectations for continued growth.

Financial Health

• Solvency: A Debt-to-Equity ratio of 0.27 suggests manageable leverage, and its Altman-Z score (4.70) signals low bankruptcy risk.
• Liquidity Concerns: While the Current Ratio (1.51) is acceptable, it lags behind 75.2% of industry peers, warranting some caution.

For a deeper dive into TEL’s financials, review the full fundamental report here.

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Disclaimer

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