TE Connectivity PLC (NYSE:TEL) Demonstrates Dividend Dependability and Financial Strength

For investors looking for dependable income sources, dividend investing is a fundamental method that mixes present income with lasting capital protection. The method used here applies ChartMill's organized filtering process, which finds companies showing both maintainable dividend distributions and good basic condition. This approach focuses on stocks with high ChartMill Dividend Ratings (7 or above) while keeping basic requirements for earnings and financial condition, making sure choices are not simply high-payment risks but businesses with the operational ability to continue and possibly raise their distributions over time.

Dividend Dependability and Increase

TE Connectivity PLC (NYSE:TEL) offers a strong example for dividend-oriented investors, reaching a ChartMill Dividend Rating of 7. This score shows complete assessment across several dividend continuity measures, which are important for investors depending on steady income. The company's dividend features contain:

• A fair dividend yield of 1.20%, which does better than 88.62% of its industry group even though it is lower than the S&P 500 average
• A notable dividend increase history with a yearly growth rate of 6.79% over recent years
• A history of keeping and raising dividends for at least 10 straight years
• A payout ratio of 54.30% of profits, showing dividends are sufficiently backed by earnings

These measures show why TEL fits the filtering standards for dividend dependability. The steady dividend increase and ten-year payment history give trust in the company's dedication to shareholder returns, while the middle-ground payout ratio indicates possibility for future raises without risking financial steadiness. For dividend investors, these points lower the chance of unexpected dividend reductions that can damage income plans.

Earnings Foundation

Good earnings supply the necessary base for maintainable dividend payments, and TEL does well here with a ChartMill Profitability Rating of 7. The company's operational effectiveness is clear across several measures:

• Outstanding operating margin of 19.30%, doing better than 95.94% of industry rivals
• Good return on invested capital of 13.51%, placed in the top 9% of the industry
• Sound profit margin of 8.78% that puts it in the top quarter of its field
• Steady cash flow production with positive operating cash flow in four of the last five years

These earnings measurements directly back the dividend filtering method by making certain the company produces enough profits to pay for both business activities and shareholder payments. The high operating margin especially shows pricing ability and operational effectiveness, which add to steady cash flows, the essential requirement of dependable dividend payments.

Financial Condition Evaluation

While TEL's total financial condition displays some combined signals with a ChartMill Health Rating of 5, the company shows good points in several important areas relevant for dividend continuity:

• Good solvency position with an Altman-Z score of 5.39, showing low failure risk
• Workable debt amounts with a debt-to-equity ratio of 0.39
• Very good debt-to-free-cash-flow ratio of 1.98, meaning the company could settle all debt in less than two years using present cash flow
• Positive return on invested capital clearly higher than the company's capital cost

The filtering method highlights financial condition to prevent companies that could reduce dividend payments during economic declines or financial pressure. Although TEL displays some softness in liquidity ratios compared to industry peers, its good solvency measurements and careful debt profile give confidence that dividend payments are not endangered by balance sheet worries.

Value and Increase Situation

From a value viewpoint, TEL trades at levels mostly similar to market averages, with a P/E ratio of 27.48 close to the S&P 500's multiple. While not heavily reduced, the value seems acceptable given the company's quality features. Increase possibilities stay positive with expected EPS growth of 9.35% each year, though this shows a slowing from past growth rates. For dividend investors centered mainly on income steadiness instead of fast increase, TEL's mix of acceptable value and medium increase possibility matches well with income-focused investment goals.

The full basic study accessible through the ChartMill Fundamental Report gives more detail across all these assessment groups for investors doing extra investigation.

For investors wanting to research similar dividend possibilities, the Best Dividend Stocks screen gives a changing list of companies meeting these controlled standards for dividend continuity, earnings, and financial condition.

Disclaimer: This article is for information purposes only and does not form investment guidance, suggestion, or support of any security. Investors should do their own study and talk with a qualified financial consultant before making investment choices. Past results are not a sign of future results, and dividend payments are not assured.