TORO CO (NYSE:TTC) – A Reliable Dividend Stock Worth Considering

TORO CO (NYSE:TTC) was identified by our Best Dividend Stocks screen as a company with strong dividend characteristics, solid profitability, and reasonable financial health. For income-focused investors, TTC presents an appealing opportunity with its consistent dividend growth and sustainable payout ratio.

Dividend Strength

• Dividend Yield: TTC offers a yield of 1.99%, slightly above the industry average of 1.83%. While not the highest yield available, it remains competitive.
• Dividend Growth: The company has increased its dividend at an average annual rate of 9.97% over the past several years, demonstrating a commitment to rewarding shareholders.
• Track Record: TTC has paid dividends for at least 10 consecutive years without a reduction, indicating reliability.
• Payout Ratio: Only 36.97% of earnings are allocated to dividends, suggesting the payout is sustainable with room for future increases.

Profitability & Financial Health

• Strong Returns: TTC delivers a Return on Equity (ROE) of 27.72% and a Return on Invested Capital (ROIC) of 15.85%, outperforming most peers in the machinery industry.
• Healthy Margins: The company maintains solid profitability with an 8.89% net profit margin and an 11.42% operating margin.
• Financial Stability: While TTC carries some debt (Debt/Equity of 0.74), its Altman-Z score of 4.60 and strong free cash flow coverage (Debt/FCF of 2.17) suggest manageable leverage.

Valuation & Growth Considerations

• Reasonable Valuation: Trading at a P/E of 18.36, TTC is priced slightly below the S&P 500 average (26.60) and is cheaper than many industry peers.
• Moderate Growth Expectations: Revenue and earnings growth have been steady but not explosive, with projected annual EPS growth of 4.15% in the coming years.

For investors seeking a dependable dividend payer with a solid financial foundation, TORO CO stands out as a well-balanced choice.

Our Best Dividend Stocks screener provides more high-quality dividend stock ideas.
For a deeper dive, review the full fundamental report on TTC.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.