A quality dividend stock screen is about more than hunting for the highest yield. The "Best Dividend Stocks" approach used on ChartMill starts by filtering for a minimum ChartMill Dividend Rating of 7, while also requiring decent profitability and health scores so that the dividend is backed by a sound business rather than a temporary payout. BROADRIDGE FINANCIAL SOLUTIO (NYSE:BR) passes that screen, and its fundamental report shows why the stock can be an interesting candidate for income-focused investors.
A dividend profile with a solid track record
Broadridge's ChartMill Dividend Rating of 8 out of 10 is the first thing that stands out. That rating reflects a combination of yield, growth, payout sustainability, and dividend history, all of which matter when building a passive income stream.
Key dividend metrics for the company:
- Dividend yield: 2.25%, above the S&P 500 average of around 1.72%
- Annual dividend growth over the last 5 years: 11.15%
- Payout ratio: 39.44% of earnings, leaving plenty of room for reinvestment
- Dividend history: paid and maintained for at least 10 years
The payout ratio is particularly important for dividend investors because it measures how much of net income is consumed by dividend payments. At 39.44%, Broadridge's dividend is comfortably covered by earnings, which reduces the risk of a sudden cut. The fact that dividend growth has been in line with earnings growth also suggests the increase is sustainable.
Investors who want to dig deeper into the underlying figures can review the complete fundamental analysis report for Broadridge.
Profitability gives the dividend a strong foundation
A dividend can only be reliable if the company is consistently profitable, and this is where Broadridge scores well. The ChartMill Profitability Rating is 9 out of 10, placing it among the stronger names in the IT Services industry.
Some of the standout profitability measures include:
- Return on Equity: 39.58%, better than 95.60% of industry peers
- Return on Invested Capital: 13.56%, outperforming 82.42% of the industry
- Profit Margin: 15.04%, among the best in its peer group
- Operating Margin: 17.40%, also well above the industry median
These margins are not just a snapshot; the report notes that both profit margin and operating margin have improved over the last couple of years. For dividend investors, that matters because earnings growth is what ultimately supports future dividend increases.
Health and valuation: points to keep in mind
No stock is without trade-offs. Broadridge's ChartMill Health Rating is 5 out of 10, which is acceptable but not stellar. The company has a Debt/Equity ratio of 1.15, which is on the higher side and indicates some dependence on debt financing. Liquidity ratios are also moderate, with a Current Ratio of 1.24 and a Quick Ratio of 1.24, both below a majority of industry peers.
On the positive side, the Altman-Z score of 4.01 points to a low near-term bankruptcy risk, and the Debt to Free Cash Flow ratio of 2.64 means the company could pay off its debt in roughly 2.6 years using free cash flow. So while leverage deserves monitoring, the overall financial position does not look precarious.
Valuation is also reasonable. The trailing Price/Earnings ratio is 17.71, which is in line with the industry and cheaper than the S&P 500 average of 26.38. The forward P/E of 15.92 suggests the market is not pricing in excessive growth expectations.
The combination of a strong dividend rating, high profitability, and a manageable health profile is exactly what this screen is designed to capture. By filtering for a Dividend Rating of at least 7, a Profitability Rating of at least 5, and a Health Rating of at least 5, the screen avoids the common pitfall of chasing yield in companies that cannot sustain it.
Free cash flow adds another layer of confirmation
Beyond dividend and profitability metrics, Broadridge also shows up on ChartMill's High Free Cash Flow screen, which highlights companies with strong cash generation, quality, and liquidity. The screen notes that BR generates strong free cash flow relative to its market price, reinforcing that the dividend is backed by actual cash flow rather than just reported earnings. Investors who want to apply this additional cash-based filter can browse the current high free cash flow stocks.
For investors who want to apply this same methodology to a broader universe, the Best Dividend screen can be run with a single click, and the results are sorted by the ChartMill Dividend Rating. Browse the current list of best dividend stocks to see which other names match the criteria.
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.
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Broadridge Financial Solutions (NYSE:BR): A Quality Dividend Stock with Solid Fundamentals
A quality dividend stock screen is about more than hunting for the highest yield. The "Best Dividend Stocks" approach used on ChartMill starts by filtering for a minimum ChartMill Dividend Rating of 7, while also requiring decent profitability and health scores so that the dividend is backed by a sound business rather than a temporary payout. BROADRIDGE FINANCIAL SOLUTIO (NYSE:BR) passes that screen, and its fundamental report shows why the stock can be an interesting candidate for income-focused investors.
A dividend profile with a solid track record
Broadridge's ChartMill Dividend Rating of 8 out of 10 is the first thing that stands out. That rating reflects a combination of yield, growth, payout sustainability, and dividend history, all of which matter when building a passive income stream.
Key dividend metrics for the company:
The payout ratio is particularly important for dividend investors because it measures how much of net income is consumed by dividend payments. At 39.44%, Broadridge's dividend is comfortably covered by earnings, which reduces the risk of a sudden cut. The fact that dividend growth has been in line with earnings growth also suggests the increase is sustainable.
Investors who want to dig deeper into the underlying figures can review the complete fundamental analysis report for Broadridge.
Profitability gives the dividend a strong foundation
A dividend can only be reliable if the company is consistently profitable, and this is where Broadridge scores well. The ChartMill Profitability Rating is 9 out of 10, placing it among the stronger names in the IT Services industry.
Some of the standout profitability measures include:
These margins are not just a snapshot; the report notes that both profit margin and operating margin have improved over the last couple of years. For dividend investors, that matters because earnings growth is what ultimately supports future dividend increases.
Health and valuation: points to keep in mind
No stock is without trade-offs. Broadridge's ChartMill Health Rating is 5 out of 10, which is acceptable but not stellar. The company has a Debt/Equity ratio of 1.15, which is on the higher side and indicates some dependence on debt financing. Liquidity ratios are also moderate, with a Current Ratio of 1.24 and a Quick Ratio of 1.24, both below a majority of industry peers.
On the positive side, the Altman-Z score of 4.01 points to a low near-term bankruptcy risk, and the Debt to Free Cash Flow ratio of 2.64 means the company could pay off its debt in roughly 2.6 years using free cash flow. So while leverage deserves monitoring, the overall financial position does not look precarious.
Valuation is also reasonable. The trailing Price/Earnings ratio is 17.71, which is in line with the industry and cheaper than the S&P 500 average of 26.38. The forward P/E of 15.92 suggests the market is not pricing in excessive growth expectations.
The combination of a strong dividend rating, high profitability, and a manageable health profile is exactly what this screen is designed to capture. By filtering for a Dividend Rating of at least 7, a Profitability Rating of at least 5, and a Health Rating of at least 5, the screen avoids the common pitfall of chasing yield in companies that cannot sustain it.
Free cash flow adds another layer of confirmation
Beyond dividend and profitability metrics, Broadridge also shows up on ChartMill's High Free Cash Flow screen, which highlights companies with strong cash generation, quality, and liquidity. The screen notes that BR generates strong free cash flow relative to its market price, reinforcing that the dividend is backed by actual cash flow rather than just reported earnings. Investors who want to apply this additional cash-based filter can browse the current high free cash flow stocks.
For investors who want to apply this same methodology to a broader universe, the Best Dividend screen can be run with a single click, and the results are sorted by the ChartMill Dividend Rating. Browse the current list of best dividend stocks to see which other names match the criteria.
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 »