Tenaris SA-ADR (NYSE:TS): A High-Yield Dividend Stock with Strong Financial Health

When searching for quality dividend stocks, investors often use screening strategies that balance income generation with fundamental strength. The "Best Dividend Stocks" screen finds companies with good dividend characteristics while keeping sound financial health and profitability measures. This method helps avoid the common mistake of pursuing high yields from companies with uncertain financial stability. By setting minimum scores of 7 for dividend rating, 5 for health rating, and 5 for profitability rating, the screen focuses on companies that might be able to maintain and increase their dividend payments over time.

Dividend Strength and Sustainability

TENARIS SA-ADR (NYSE:TS) offers a strong case for dividend investors, receiving a ChartMill Dividend Rating of 7 out of 10. The company's dividend profile displays several favorable traits that match the screening method's focus on reliable income generation.

• Current dividend yield of 4.31%, much higher than the S&P 500 average of 2.35%
• Ten-year history of dividend payments with no reductions in the past three years
• Notable dividend growth rate of 10.42% each year over recent years
• Payout ratio of 44.92%, showing distribution levels that can be maintained

The screening method favors dependable dividend payers, and Tenaris shows this with its steady payment history and sensible payout ratio. While very high payout ratios can indicate possible dividend risk, Tenaris uses a measured method that keeps capital for reinvestment while providing returns to shareholders.

Profitability Supporting Dividend Payments

Tenaris receives a solid ChartMill Profitability Rating of 8, offering fundamental backing for its dividend distributions. The company's profitability measures show effective operations and good earning power compared to others in the industry.

• Return on Invested Capital of 9.47%, doing better than 73% of industry rivals
• Profit margin of 17.02% puts the company in the top 5% of its sector
• Operating margin of 17.12% is higher than 78% of industry peers
• Steady positive earnings and cash flow generation over many years

These profitability measures directly align with the screening strategy's need for adequate profitability, as companies with good earning power are in a better position to keep up dividend payments during economic slowdowns and continue dividend increases during growth periods.

Financial Health Guaranteeing Dividend Continuity

With a top ChartMill Health Rating of 10, Tenaris shows very good financial strength that gives extra confidence in its capacity to maintain dividend payments. The company's balance sheet and liquidity position are notable within the energy equipment and services sector.

• Very low debt reliance with a Debt/Equity ratio of 0.01, superior to 92% of industry peers
• Good liquidity position with Current Ratio of 3.41 and Quick Ratio of 2.11
• Altman-Z score of 5.68 shows very little bankruptcy risk
• Debt-to-Free-Cash-Flow ratio of 0.25 indicates fast debt repayment ability

The screening method's health requirement is important here, as companies with strong balance sheets can continue dividends during industry downturns without harming their operational stability or investment for growth.

Valuation and Growth Considerations

Tenaris trades at appealing valuation multiples while displaying varied growth traits. The company's valuation profile indicates possible upside in addition to the dividend income, while growth measures show some short-term difficulties.

• P/E ratio of 8.45 shows a large discount to the S&P 500 average of 26.10
• Forward P/E of 10.20 stays below industry and market averages
• Revenue fell 15.77% in the past year in spite of good historical growth
• Expected EPS decrease of 1.54% each year differs from past growth patterns

While the screening method does not specifically look for growth stocks, knowing growth dynamics helps evaluate future dividend sustainability. Tenaris's present struggles in keeping growth momentum deserve attention, although its good profitability and health measures provide protection against temporary problems.

Complete Fundamental Assessment

The detailed fundamental analysis report for Tenaris shows a company with excellent financial health and profitability backing a good dividend profile. The mix of these elements makes it especially appropriate for dividend-focused investors looking for companies with the ability to maintain payouts.

For investors wanting to find similar opportunities, the Best Dividend Stocks screen gives more candidates that fit the standards of strong dividend characteristics supported by adequate profitability and financial health.

This article presents an analysis of Tenaris SA-ADR for informational purposes only and does not constitute investment advice, recommendation, or endorsement of any security. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance does not guarantee future results, and dividend payments are subject to company discretion and market conditions.