Zimmer Biomet Holdings Inc (NYSE:ZBH) - A Reliable Dividend Stock Worth Considering

Zimmer Biomet Holdings Inc (NYSE:ZBH) was identified as a strong dividend candidate by our stock screener. The company combines a solid dividend track record with decent profitability and financial health, making it an interesting option for income-focused investors.

Dividend Strength

• Consistent Payouts: ZBH has paid dividends for at least 10 years without reductions, demonstrating reliability.
• Sustainable Payout Ratio: Only 21.28% of earnings are allocated to dividends, leaving room for future growth.
• Modest Yield: The current yield of 1.01% is below the S&P 500 average but competitive within its industry, outperforming 93.65% of peers.

Profitability Highlights

• Strong Margins: ZBH boasts an operating margin of 19.59%, ranking in the top 7% of its sector.
• Healthy Returns: Its return on equity (7.37%) and return on invested capital (5.99%) are above industry averages.
• Positive Cash Flow: The company has maintained positive operating cash flow over the past five years.

Financial Health Considerations

• Debt Management: While ZBH carries a moderate debt load (Debt/Equity of 0.53), its liquidity remains stable with a current ratio of 2.44.
• Solvency Concerns: The Altman-Z score (2.62) suggests some risk, though still better than 66.67% of industry peers.

For a deeper dive into ZBH’s fundamentals, review the full report here.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.