THOMSON REUTERS CORP (NASDAQ:TRI): A High-Yield Dividend Stock with Strong Profitability

In the search for dependable income from stocks, many investors choose dividend-focused methods that emphasize both yield and long-term viability. One typical technique uses filters for businesses with good dividend scores, reliable earnings, and sound finances, criteria meant to find companies able to continue and increase their dividends. This process helps sidestep high-yield situations where unstable payouts might point to fundamental company problems. THOMSON REUTERS CORP (NASDAQ:TRI) recently appeared using this filter, showing a mix of appealing income traits and business performance.

Dividend Strength and Reliability
TRI is notable for its strong dividend characteristics, a main factor for investors targeting income. The company provides an attractive yield of 6.20%, much higher than the industry norm of 3.09% and the S&P 500’s 2.38%. Importantly, this is not a fixed payment; TRI has shown an ability to raise its dividend, with an annual growth rate of 8.41% in recent years. It also has a history of steady payments for at least ten years, confirming its dedication to giving capital back to shareholders. These elements are vital in dividend investing, as they signal not only a willingness to pay but also longevity and a culture that values shareholders.

Profitability Supporting Payments
A large dividend is only valuable if backed by earnings, and TRI’s profitability measurements offer confidence. The company receives a ChartMill Profitability Rating of 7, indicating effective operations and good margins. Important numbers consist of:

• A profit margin of 22.29%, placing it in the top 6% of its industry
• An operating margin of 29.38%, better than 95% of similar companies
• Return on invested capital of 11.24%, higher than 71% of rivals

These measurements are important because strong profitability creates the cash required to maintain dividends without hurting growth or financial soundness. TRI’s skill in keeping and even improving its margins over time hints at a market edge and careful management, both good signs for dividend continuity.

Financial Health Factors
While TRI’s total ChartMill Health Rating is a good 6, it shows varied results. On the positive end, the company displays good solvency, with a low debt-to-equity ratio of 0.12 and an Altman-Z score of 9.75, showing very little chance of bankruptcy. It has also lowered its number of shares over time, indicating effective capital use. However, investors should be aware of a liquidity issue: TRI’s current and quick ratios are both at 0.79, under preferred levels and lower than 83% of industry counterparts. This might create difficulties in covering immediate debts, although its good cash flow and profit margins could lessen near-term concerns.

Valuation and Growth Background
TRI’s valuation is high compared to standards, with a P/E ratio of 42.77 versus an industry average of 21.9. This higher price might be somewhat reasonable due to its strong profitability and dividend attractiveness, but it implies little room for underperformance. Growth is steady, with revenue increasing about 4% per year and EPS predicted to grow approximately 10.5% in the next few years. For dividend investors, this sufficient growth aids future dividend rises without needing fast expansion.

Conclusion
TRI offers a strong argument for dividend investors looking for a high yield along with a record of growth and a fundamentally successful company. Its good margins and solvency give a reliable base for ongoing dividends, although the high valuation and lower liquidity deserve continued observation. For those focusing on income, TRI’s mix of yield, growth, and business performance fits nicely with a careful dividend-investing plan.

For readers wanting to examine other good dividend stocks found using similar strict filtering, the Best Dividend Stocks screener provides a selected list of options for more study.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Investors should conduct their own research and consider their financial situation and risk tolerance before making investment decisions.