The Best Dividend screen is designed to surface stocks that offer a strong dividend profile without sacrificing the fundamental quality needed to sustain it. The methodology starts from the ChartMill Dividend Rating, which evaluates yield, payout sustainability and dividend history, but it also enforces minimum thresholds for profitability and financial health so that investors are not simply chasing the highest yielders. LEVI STRAUSS & CO- CLASS A (NYSE:LEVI) is Levi Strauss & Co. (NYSE:LEVI), a global apparel company that emerged from this screen with a dividend rating of 7, a profitability rating of 9 and a health rating of 5, making it a relevant candidate for income-focused investors applying a quality filter.
A dividend yield that stands out in its sector
What makes LEVI interesting from a dividend perspective is not just the headline yield, but how that yield compares with its industry. The company pays a yearly dividend yield of 2.59%, which is roughly double the average of 1.26% across the Textiles, Apparel & Luxury Goods industry and comfortably above the S&P 500 average of 1.70%. LEVI also pays more dividend than 84% of the companies in its peer group.
The dividend track record adds to the appeal. LEVI has been paying a dividend for over five years and has not reduced it during that period. The dividend has grown at an annual rate of 27.50% over the past five years, which signals a commitment to returning capital to shareholders. With a payout ratio of 34.07% of net income, the current dividend is well covered by earnings and leaves plenty of room for reinvestment in the business.
One caution does come out of the report: the dividend is growing faster than earnings. While the payout ratio is still sustainable today, a continued gap between dividend growth and earnings growth could put pressure on future increases. Dividend investors should keep an eye on whether earnings growth can catch up.
Profitability and health: the supporting pillars
A high dividend is only attractive if the underlying business can sustain it. This is where the screen's profitability and health requirements come into play. The screen asks for a minimum profitability rating of 5 and a minimum health rating of 5, and LEVI clears both, albeit with different levels of conviction.
The profitability picture is the strongest part of the thesis. LEVI scores 9 out of 10 on the ChartMill Profitability Rating, supported by:
- Return on Assets of 9.64%, outperforming 81.82% of industry peers
- Return on Equity of 28.13%, outperforming 84.09% of industry peers
- Return on Invested Capital of 13.86%, outperforming 81.82% of industry peers
- Gross margin of 61.72%, among the best in the industry
- A profit margin of 9.66%, better than 84.09% of its peers
The health rating of 5 is the weaker link, though it still satisfies the screen's threshold. The Altman-Z score of 3.17 suggests the company is financially healthy with limited bankruptcy risk, and the debt to free cash flow ratio of 1.86 indicates that LEVI could pay off all of its debts in less than two years of free cash flow. On the liquidity side, however, the current ratio of 1.60 is on the low side versus the industry, and the quick ratio of 0.98 raises some questions about short-term obligations. These are not red flags on their own, but they explain why LEVI does not score higher on health.
How LEVI lines up with the screen criteria
The screen itself is built around a few clear filters, and LEVI meets each one:
- ChartMill Dividend Rating of 7, meeting the minimum of 7
- ChartMill Profitability Rating of 9, well above the minimum of 5
- ChartMill Health Rating of 5, just meeting the minimum of 5
- Dividend yield of 2.59% versus an industry average of 1.26%
- Payout ratio of 34.07%, considered sustainable for now
- Five-year dividend growth of 27.50% annually
The combination matters for the strategy. A strong dividend rating identifies companies with a solid yield and history, but it is the profitability filter that provides confidence the earnings power is there to keep paying. The health filter, even at a moderate score, acts as a guard against companies carrying excessive debt or facing liquidity stress. LEVI scores particularly well on the first two, which makes it a reasonable fit for investors who want income with a quality tilt.
Investors who want to review the full breakdown of ratios, ratings and dividend charts behind this analysis can consult the detailed fundamental analysis report.
Free cash flow adds a supporting angle
LEVI also shows up on a separate screen built around cash generation rather than dividend metrics. The High Free Cash Flow Stocks screen combines strong free cash flow with quality and liquidity filters, and LEVI’s profile notes that it generates strong free cash flow relative to its market price. That directly supports the dividend thesis, since cash flow is ultimately what funds payouts and future increases.
Screening for more dividend candidates
The value of a rules-based screen is that it can be applied consistently across the market. LEVI is one example of a stock that passes the current criteria, but the screen is designed to be rerun over time as ratings and market conditions change. Investors who want to identify other stocks matching this same methodology can find them through the Best Dividend screen, which applies the identical dividend, profitability and health filters to the broader universe.
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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Levi Strauss (NYSE:LEVI): A Quality Dividend Pick for Income Investors
The Best Dividend screen is designed to surface stocks that offer a strong dividend profile without sacrificing the fundamental quality needed to sustain it. The methodology starts from the ChartMill Dividend Rating, which evaluates yield, payout sustainability and dividend history, but it also enforces minimum thresholds for profitability and financial health so that investors are not simply chasing the highest yielders. LEVI STRAUSS & CO- CLASS A (NYSE:LEVI) is Levi Strauss & Co. (NYSE:LEVI), a global apparel company that emerged from this screen with a dividend rating of 7, a profitability rating of 9 and a health rating of 5, making it a relevant candidate for income-focused investors applying a quality filter.
A dividend yield that stands out in its sector
What makes LEVI interesting from a dividend perspective is not just the headline yield, but how that yield compares with its industry. The company pays a yearly dividend yield of 2.59%, which is roughly double the average of 1.26% across the Textiles, Apparel & Luxury Goods industry and comfortably above the S&P 500 average of 1.70%. LEVI also pays more dividend than 84% of the companies in its peer group.
The dividend track record adds to the appeal. LEVI has been paying a dividend for over five years and has not reduced it during that period. The dividend has grown at an annual rate of 27.50% over the past five years, which signals a commitment to returning capital to shareholders. With a payout ratio of 34.07% of net income, the current dividend is well covered by earnings and leaves plenty of room for reinvestment in the business.
One caution does come out of the report: the dividend is growing faster than earnings. While the payout ratio is still sustainable today, a continued gap between dividend growth and earnings growth could put pressure on future increases. Dividend investors should keep an eye on whether earnings growth can catch up.
Profitability and health: the supporting pillars
A high dividend is only attractive if the underlying business can sustain it. This is where the screen's profitability and health requirements come into play. The screen asks for a minimum profitability rating of 5 and a minimum health rating of 5, and LEVI clears both, albeit with different levels of conviction.
The profitability picture is the strongest part of the thesis. LEVI scores 9 out of 10 on the ChartMill Profitability Rating, supported by:
The health rating of 5 is the weaker link, though it still satisfies the screen's threshold. The Altman-Z score of 3.17 suggests the company is financially healthy with limited bankruptcy risk, and the debt to free cash flow ratio of 1.86 indicates that LEVI could pay off all of its debts in less than two years of free cash flow. On the liquidity side, however, the current ratio of 1.60 is on the low side versus the industry, and the quick ratio of 0.98 raises some questions about short-term obligations. These are not red flags on their own, but they explain why LEVI does not score higher on health.
How LEVI lines up with the screen criteria
The screen itself is built around a few clear filters, and LEVI meets each one:
The combination matters for the strategy. A strong dividend rating identifies companies with a solid yield and history, but it is the profitability filter that provides confidence the earnings power is there to keep paying. The health filter, even at a moderate score, acts as a guard against companies carrying excessive debt or facing liquidity stress. LEVI scores particularly well on the first two, which makes it a reasonable fit for investors who want income with a quality tilt.
Investors who want to review the full breakdown of ratios, ratings and dividend charts behind this analysis can consult the detailed fundamental analysis report.
Free cash flow adds a supporting angle
LEVI also shows up on a separate screen built around cash generation rather than dividend metrics. The High Free Cash Flow Stocks screen combines strong free cash flow with quality and liquidity filters, and LEVI’s profile notes that it generates strong free cash flow relative to its market price. That directly supports the dividend thesis, since cash flow is ultimately what funds payouts and future increases.
Screening for more dividend candidates
The value of a rules-based screen is that it can be applied consistently across the market. LEVI is one example of a stock that passes the current criteria, but the screen is designed to be rerun over time as ratings and market conditions change. Investors who want to identify other stocks matching this same methodology can find them through the Best Dividend screen, which applies the identical dividend, profitability and health filters to the broader universe.
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 »