Xylem Inc. (NYSE:XYL): A Steady Dividend Stock for Income Investors

For investors looking for steady income, dividend investing is a proven method for creating wealth. One process uses filters to find companies that provide appealing dividends and also show basic soundness to continue those payments. This method usually centers on stocks with good dividend scores while keeping acceptable profit and financial condition measures, making sure the dividend is not at risk from business shortcomings or balance sheet issues.

XYLEM INC (NYSE:XYL), a worldwide water technology company, appears as a noteworthy option via this filtering method. The company's attention on essential water systems and preservation methods places it in a stable industry with lasting expansion possibilities, while its basic measures indicate it might work as a steady dividend part in a portfolio.

Dividend Steadiness and Increase

Xylem's dividend details display various traits that income-focused investors usually look for. The company has built a history of regular and rising payments, which is important for dividend continuity.

• Dividend Increase History: Xylem has raised its dividend for a minimum of ten straight years, indicating management's dedication to giving capital back to owners
• Reasonable Payout Ratio: With a payout ratio of 39.55% of earnings, the company keeps enough capital for new investment while compensating owners
• Rising Payments: The dividend has increased at a yearly rate of 8.36% over recent years, offering a guard against inflation

These points add to Xylem's ChartMill Dividend Rating of 7 out of 10, showing a good dividend profile compared to others in the industry. The modest present yield of 1.07% might interest investors who value dividend increase more than current high income, as quickly rising dividends frequently result in better yields on cost later.

Profitability Foundation

A company's capacity to continue and increase dividends basically relies on its profit generation. Xylem shows decent profit measures that back its dividend payments.

• Sound Margins: The company keeps a profit margin of 10.74%, doing better than 76% of machinery industry companies
• Steady Activities: Gross margins of 37.81% show price control and effective cost handling
• Regular Results: Xylem has produced positive earnings and operating cash flow in every one of the last five years

These profit measures result in a ChartMill Profitability Rating of 6, showing enough earning capacity to maintain dividend duties. For dividend investors, this profit generation gives assurance that payments are not being paid for by debt or selling assets, which would not be lasting over time.

Financial Condition Evaluation

Dividend continuity needs a sturdy balance sheet to handle economic declines without reducing payments. Xylem's financial condition measures suggest enough strength.

• Careful Debt Use: A debt-to-equity ratio of 0.17 shows little dependence on loans
• Good Solvency: An Altman-Z score of 4.65 points to a small chance of failure
• Sufficient Liquidity: Current and quick ratios of 1.90 and 1.43 each give short-term room to maneuver

The company's ChartMill Health Rating of 6 shows a firm financial base. For dividend investors, this condition review is important because companies with poor balance sheets often reduce dividends during economic pressure to save money.

Valuation and Expansion Factors

While Xylem sells at high value measures compared to industry averages, this should be viewed next to its expansion chances and stable business approach.

• Earnings Growth: Experts forecast yearly EPS growth of 10.56% in coming years
• Sales Path: The company has achieved 10.28% yearly sales growth over recent years
• High Multiple: Current P/E of 32.04 shows market beliefs for continued performance

The full fundamental analysis report gives more background on how these factors connect within Xylem's total investment profile.

For investors wanting to examine comparable dividend chances, the Best Dividend Stocks screen presents more choices that fit similar standards for dividend quality, profit generation, and financial condition.

Disclaimer: This examination is founded on basic data and ratings given by ChartMill and shows a neutral evaluation of the company's measures. It is not meant as investment guidance, and investors should perform their own study and think about their personal money situation before making investment choices.