TEGNA INC (NYSE:TGNA): A High-Dividend-Rated Stock with Strong Fundamentals

For investors looking for a dependable source of passive income, a methodical screening strategy is necessary. One useful method is to search for companies that provide a good dividend now and also have the fundamental financial soundness to maintain and possibly increase those payments in the future. This process includes selecting stocks with a high dividend rating, a combined score assessing yield, growth, and sustainability, while also setting minimum standards for profitability and financial condition. This technique seeks to avoid high-yield pitfalls and find companies where the dividend is backed by a strong business model.

TEGNA INC (NYSE:TGNA) appears as a candidate from this type of screening process, deserving more attention from income-oriented investors.

Dividend Profile: A Balance of Yield and Growth

The main attraction for a dividend investor is found in TEGNA's dividend traits, which are reflected in its good ChartMill Dividend Rating of 7 out of 10. A complete examination of this rating is provided in the full fundamental analysis report.

• Current Yield: The company provides a yearly dividend yield near 2.53%. This yield is substantial, particularly when measured against its industry group and the wider S&P 500 average.
• Track Record and Growth: TEGNA shows a steady history, having distributed dividends for at least ten years without a decrease in the last five years. Additionally, it has increased its dividend at an average yearly rate above 11% during this time. This steady increase is a key element, as it helps guard an investor's income from inflation and shows management's belief in future cash flows.
• Sustainability: Most critically, the dividend seems secure. TEGNA uses only around 23% of its earnings for dividend payments, a low payout ratio. This provides significant capacity to fund business operations, handle debt, and continue the dividend during times of lower earnings.

Supporting Fundamentals: Profitability and Financial Health

A lasting dividend cannot be assessed alone; it needs the support of a profitable and financially stable company. This is why filtering for adequate profitability and condition ratings is a key part of the strategy. TEGNA performs acceptably on these measures, forming a base for its dividend policy.

Profitability Condition: TEGNA receives a Profitability Rating of 7. The company is regularly profitable, with important measures performing well within the media industry.

• It has good margins, including an operating margin over 20%, doing better than most of its competitors.
• Returns on assets and invested capital are also high compared to the industry, showing effective use of capital to produce earnings.

Sound Financial Condition: With a Health Rating of 8, TEGNA displays a steady financial position. This is important for dividend investors, since a company with high debt or poor liquidity is more prone to reduce its payout in an economic downturn.

• Liquidity is good, with current and quick ratios above 2.2, indicating the company can easily meet its immediate liabilities.
• Solvency measures are solid. The Altman-Z score shows no short-term bankruptcy danger, and the debt-to-equity ratio, while existing, is at an acceptable level. Importantly, the company has been lowering its debt level and repurchasing shares, both activities that can aid shareholder returns.

Valuation and Growth Considerations

From a valuation viewpoint, TEGNA seems low-priced. Its Price-to-Earnings ratio of 8.3 is much lower than both the industry and S&P 500 averages, and its forward P/E is lower still. This valuation may be interesting for value-focused dividend investors.

However, the screening process also shows a point for care: growth. The company's Growth Rating is a modest 2. Revenue has been unchanged to slightly down lately, and analyst forecasts suggest decreases in both earnings and revenue in the next few years. This highlights the need to know the company's business situation—TEGNA works in the traditional broadcast media field, which encounters long-term difficulties. For a dividend investor, the central issue is if the company's good profitability, stable balance sheet, and low payout ratio are enough to continue its dividend in spite of a possibly difficult growth setting.

Conclusion

TEGNA INC serves as an example of using a measured dividend screening strategy. It fits the main requirements of a steady and increasing dividend supported by good profitability and financial condition. The very low payout ratio works as an important cushion, and the inexpensive valuation may provide some safety. The main point for investors concerns the company's limited growth outlook and if its core broadcast and advertising operations can produce stable enough cash flows to maintain its shareholder returns policy over a long period.

For investors who value income steadiness and fundamental soundness over high growth, TGNA presents an interesting profile worth more investigation.

This examination was obtained from a methodical screen for good dividend stocks. You can review the complete list of present candidates that fit related standards by running the "Best Dividend Stocks" screen yourself.

Disclaimer: This article is for informational purposes only and does not constitute financial advice, a recommendation, or an offer or solicitation to buy or sell any securities. The information presented is based on data provided and should not be the sole basis for any investment decision. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.