The Best Dividend Stocks screen starts from a simple premise: a high dividend rating should be backed by acceptable profitability and financial health. SHELL PLC-ADR (NYSE:SHEL) fits that profile, carrying a ChartMill Dividend Rating of 8 out of 10 while also clearing the screen's minimum thresholds for profitability and health.
A dividend profile that stands out
For dividend investors, Shell offers a combination that is not always easy to find in the energy space: a meaningful yield with room for growth and a payout that looks sustainable. The fundamental report behind the screen shows a yearly dividend yield of 4.56%, well above both the industry average of 3.42% and the S&P 500 average of roughly 1.72%.
What makes the income case more compelling is the dividend growth history. Shell's dividend has been growing at an annual rate of 8.63%, and the company has maintained a dividend for at least 10 years. At the same time, the payout ratio stands at 32.48% of income, which suggests the current distribution is not stretched. The report also notes that earnings are growing faster than the dividend, which supports the sustainability of future increases.
Key dividend and fundamental metrics
- Dividend rating: 8/10
- Dividend yield: 4.56%
- Dividend growth (5-year annualized): 8.63%
- Payout ratio: 32.48%
- Profitability rating: 6/10
- Health rating: 6/10
- Valuation rating: 8/10
Investors looking for a deeper breakdown of the score can consult this fundamental analysis report.
Why the quality filters matter
A high dividend yield alone is rarely a sufficient reason to buy a stock. The screen addresses this by requiring a minimum ChartMill Profitability Rating of 5 and a minimum Health Rating of 5. Shell clears both with a 6, which adds a layer of confidence that the dividend is being paid by a company generating real earnings and maintaining a workable balance sheet.
Profitability is supported by a return on equity of 14.37% and a positive track record of earnings and operating cash flow over the past five years. On the health side, Shell's debt to free cash flow ratio of 2.32 is better than 77.25% of its industry peers, and the current ratio of 1.43 suggests manageable short-term obligations. There are some blemishes, including a return on invested capital that remains below the cost of capital and a recently higher debt-to-assets ratio, but these are not unusual for a large integrated energy company and do not undermine the dividend case.
Finding more stocks with the same discipline
The point of screening for dividend stocks this way is to avoid the trap of chasing yield without regard for quality. Shell demonstrates why that discipline matters: a sustainable payout ratio, a growing dividend, and a valuation that is still reasonable, with a price-to-earnings ratio of 9.71 against an industry average closer to 41.
Investors who want to replicate this approach across a broader universe of names can run the same methodology through the Best Dividend Stocks screen and review the results sorted by dividend rating.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »
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Shell (NYSE:SHEL) Stands Out for Dividend Quality and Sustainable Growth
The Best Dividend Stocks screen starts from a simple premise: a high dividend rating should be backed by acceptable profitability and financial health. SHELL PLC-ADR (NYSE:SHEL) fits that profile, carrying a ChartMill Dividend Rating of 8 out of 10 while also clearing the screen's minimum thresholds for profitability and health.
A dividend profile that stands out
For dividend investors, Shell offers a combination that is not always easy to find in the energy space: a meaningful yield with room for growth and a payout that looks sustainable. The fundamental report behind the screen shows a yearly dividend yield of 4.56%, well above both the industry average of 3.42% and the S&P 500 average of roughly 1.72%.
What makes the income case more compelling is the dividend growth history. Shell's dividend has been growing at an annual rate of 8.63%, and the company has maintained a dividend for at least 10 years. At the same time, the payout ratio stands at 32.48% of income, which suggests the current distribution is not stretched. The report also notes that earnings are growing faster than the dividend, which supports the sustainability of future increases.
Key dividend and fundamental metrics
Investors looking for a deeper breakdown of the score can consult this fundamental analysis report.
Why the quality filters matter
A high dividend yield alone is rarely a sufficient reason to buy a stock. The screen addresses this by requiring a minimum ChartMill Profitability Rating of 5 and a minimum Health Rating of 5. Shell clears both with a 6, which adds a layer of confidence that the dividend is being paid by a company generating real earnings and maintaining a workable balance sheet.
Profitability is supported by a return on equity of 14.37% and a positive track record of earnings and operating cash flow over the past five years. On the health side, Shell's debt to free cash flow ratio of 2.32 is better than 77.25% of its industry peers, and the current ratio of 1.43 suggests manageable short-term obligations. There are some blemishes, including a return on invested capital that remains below the cost of capital and a recently higher debt-to-assets ratio, but these are not unusual for a large integrated energy company and do not undermine the dividend case.
Finding more stocks with the same discipline
The point of screening for dividend stocks this way is to avoid the trap of chasing yield without regard for quality. Shell demonstrates why that discipline matters: a sustainable payout ratio, a growing dividend, and a valuation that is still reasonable, with a price-to-earnings ratio of 9.71 against an industry average closer to 41.
Investors who want to replicate this approach across a broader universe of names can run the same methodology through the Best Dividend Stocks screen and review the results sorted by dividend rating.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always conduct your own research and consider your risk tolerance before making investment decisions.
Read full article here »