Travel + Leisure Co (NYSE:TNL) Identified as a High-Quality Dividend Stock

Travel + Leisure Co (NYSE:TNL) has been identified by a methodical screening process made to find good dividend-paying stocks. This process uses the ChartMill Dividend Rating system, which examines companies on several factors such as dividend sustainability, growth history, and payout reliability. The screen looks for stocks with a Dividend Rating of 7 or more, making sure they pass strict dividend quality measures, while also needing minimum ratings of 5 for both profitability and financial condition to remove companies with basic operational issues or balance sheet problems. This detailed method helps investors steer clear of the frequent mistake of pursuing high yields without looking at the fundamental strength needed to keep those payments going over time.

Dividend Profile Analysis

Travel + Leisure Co makes a strong case for dividend investors, reaching a Dividend Rating of 7 that puts it in the group of high-quality income-producing stocks. The company's dividend features show why it fits the screening requirements for dependable income creation:

• Dividend Yield: At 3.73%, TNL's yield is much higher than the S&P500 average of 2.36% and does better than 88.81% of its Hotels, Restaurants & Leisure industry counterparts
• Payout Sustainability: Using only 37.03% of earnings for dividend payments, the company keeps a careful payout ratio that gives a good buffer for continuing distributions during economic declines
• Track Record: The company has continued dividend payments for at least ten straight years, showing management's dedication to giving capital back to shareholders
• Growth Trajectory: Although the annual dividend growth rate of 2.47% is moderate, it is higher than inflation and adds to real income growth for investors

The mix of a higher-than-average yield, sustainable payout ratio, and proven payment history matches well with the screening process's focus on dependable income creation instead of chasing after potentially unstable high yields.

Financial Health Assessment

Travel + Leisure Co's financial condition rating of 6 shows a stable position with clear strengths in liquidity, which is important for dividend investors worried about a company's capability to handle economic cycles while continuing payments:

• Strong Liquidity Position: The company shows very good short-term financial flexibility with a Current Ratio of 3.71 and Quick Ratio of 2.70, both doing better than about 94% of industry counterparts
• Debt Management: While the Debt to Free Cash Flow ratio of 11.31 seems high, this is similar to industry standards, with TNL performing more favorably than 55% of rivals
• Shareholder Alignment: The decrease in shares outstanding over both one-year and five-year periods shows management's attention on improving shareholder value through capital return programs

These condition measures give assurance that the company has the financial steadiness to keep its dividend through different market environments, a main factor in the screening process that helps avoid companies with possible dividend coverage risks.

Profitability and Valuation Context

The company's profitability rating of 6, paired with a good valuation profile, creates a base that supports ongoing dividend payments while offering possible capital appreciation:

• Return Metrics: TNL produces a Return on Invested Capital of 10.78%, which is higher than the cost of capital and does better than 75% of industry competitors
• Margin Strength: Operating margins of 19.84% and profit margins of 10.14% both are in the top quarter of the industry, giving a solid earnings foundation for dividend coverage
• Good Valuation: With a P/E ratio of 9.93 and forward P/E of 8.34, the stock is priced at a large discount to both the S&P500 averages and industry counterparts, with 92% of competitors having higher earnings multiples

The screen's use of profitability limits makes sure that dividend payments are backed by real business earnings instead of being paid for by debt or asset sales, which could threaten long-term sustainability.

Growth Outlook and Dividend Sustainability

While TNL's growth rating of 4 shows moderate historical performance, indicators looking forward point to building momentum that could help future dividend rises:

• Earnings Acceleration: EPS is forecast to increase by 12.84% each year in coming years, a notable gain over historical growth rates
• Revenue Recovery: After times of reduction, revenue growth is anticipated to become positive at 4.10% each year
• Sustainable Trajectory: The quickening earnings growth compared to the moderate dividend growth rate shows the company has significant ability to continue and possibly raise distributions

This growth picture is especially important for dividend investors looking for companies that can grow their payouts over time, rather than just keeping unchanged distributions that lose buying power to inflation.

Travel + Leisure Co stands for the kind of stable opportunity that dividend screening processes try to find, companies providing good yields backed by sustainable payout ratios, sufficient financial condition, and acceptable profitability. The full fundamental analysis report gives more detail for investors doing more due diligence.

For investors looking for similar dividend chances, the Best Dividend Stocks screen provides a regularly refreshed list of companies meeting these careful criteria.

This analysis is based on fundamental data and screening processes for informational purposes only and should not be taken as investment advice. Investors should do their own research and think about their personal financial situations before making investment decisions.