The Best Dividend screen approaches income investing by combining a high ChartMill Dividend Rating with acceptable levels of profitability and health. That methodology filters out names that rely on an impressive yield alone, and it is why ENERSYS (NYSE:ENS) stands out as a candidate for dividend investors.
A Dividend Profile Built for the Long Term
EnerSys earns a ChartMill Dividend Rating of 7 out of 10, which places it in the top tier of the screen's dividend filter. The rating is based on more than just the size of the payout; it rewards consistency, growth, and sustainability.
- Dividend yield: 1.00%, above the Electrical Equipment industry average of 0.88% but below the S&P 500 average of 2.01%
- Dividend growth: an annualized growth rate of 7.56% over the past five years
- Dividend history: the company has paid a dividend for at least 10 years and has not decreased it in that period
- Payout ratio: only 10.95% of earnings are spent on dividends, a low and sustainable level
The combination of a modest payout ratio and steady growth suggests management has room to continue increasing the distribution without straining the balance sheet. Dividends are also growing at roughly the same pace as earnings, which is a sign the payout is on a sustainable trajectory. Investors who want to dig deeper into the trends behind these figures can review the complete fundamental analysis report.
Profitability and Health Provide the Backing
The Best Dividend screen requires a ChartMill Health Rating of at least 5 and a ChartMill Profitability Rating of at least 5, and EnerSys clears both by a wide margin. The company scores 8 for health and 9 for profitability, which matters because a dividend is only as reliable as the business that pays it.
Key metrics from the fundamental report illustrate the strength:
- Return on invested capital: 14.94%, better than 93.48% of industry peers
- Return on equity: 17.90%, better than 88.04% of industry peers
- Operating margin: 14.46%, among the best in its industry
- Altman-Z score: 4.93, indicating low bankruptcy risk
- Debt to free cash flow: 1.45, well below the levels that typically cause concern
- Current ratio: 2.80, pointing to solid short-term liquidity
These figures support the screen's logic. A company generating strong returns and maintaining a healthy balance sheet is far more likely to keep its dividend promises through economic cycles. At the same time, the profitability rating adds confidence because the payout is backed by actual earnings power, not just cash reserves.
Why the Criteria Matter for Dividend Investors
The Best Dividend screen is specifically designed to avoid the common dividend trap: a very high yield that results from a falling share price and might be cut later. By requiring a minimum dividend rating along with decent health and profitability scores, the screen favors companies where the payout is supported by the fundamentals.
EnerSys fits that profile. Its yield is moderate, but the dividend has a long track record, a low payout ratio, and a reasonable growth rate. The profitability and health scores add further assurance that the company has the financial flexibility to maintain the dividend while reinvesting in the business. For income investors, that combination is often more valuable than a double-digit yield that turns out to be temporary.
Free Cash Flow Adds Another Layer of Support
EnerSys also appears in the High Free Cash Flow Stocks screen thanks to strong free cash flow relative to its market price. That reinforces the dividend thesis: a company generating ample cash after reinvestment is better positioned to maintain and grow its payout without relying on debt or financial strain.
Finding More Dividend Candidates
The screen that surfaced EnerSys applies a consistent set of thresholds across the market, including a minimum ChartMill Dividend Rating of 7 and minimum ratings of 5 for both profitability and health. Investors who want to identify other stocks with a similar combination of dependable dividends and sound fundamentals can view the full results of the Best Dividend screen.
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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EnerSys (NYSE:ENS) Delivers Dividend Quality for Income Investors
The Best Dividend screen approaches income investing by combining a high ChartMill Dividend Rating with acceptable levels of profitability and health. That methodology filters out names that rely on an impressive yield alone, and it is why ENERSYS (NYSE:ENS) stands out as a candidate for dividend investors.
A Dividend Profile Built for the Long Term
EnerSys earns a ChartMill Dividend Rating of 7 out of 10, which places it in the top tier of the screen's dividend filter. The rating is based on more than just the size of the payout; it rewards consistency, growth, and sustainability.
The combination of a modest payout ratio and steady growth suggests management has room to continue increasing the distribution without straining the balance sheet. Dividends are also growing at roughly the same pace as earnings, which is a sign the payout is on a sustainable trajectory. Investors who want to dig deeper into the trends behind these figures can review the complete fundamental analysis report.
Profitability and Health Provide the Backing
The Best Dividend screen requires a ChartMill Health Rating of at least 5 and a ChartMill Profitability Rating of at least 5, and EnerSys clears both by a wide margin. The company scores 8 for health and 9 for profitability, which matters because a dividend is only as reliable as the business that pays it.
Key metrics from the fundamental report illustrate the strength:
These figures support the screen's logic. A company generating strong returns and maintaining a healthy balance sheet is far more likely to keep its dividend promises through economic cycles. At the same time, the profitability rating adds confidence because the payout is backed by actual earnings power, not just cash reserves.
Why the Criteria Matter for Dividend Investors
The Best Dividend screen is specifically designed to avoid the common dividend trap: a very high yield that results from a falling share price and might be cut later. By requiring a minimum dividend rating along with decent health and profitability scores, the screen favors companies where the payout is supported by the fundamentals.
EnerSys fits that profile. Its yield is moderate, but the dividend has a long track record, a low payout ratio, and a reasonable growth rate. The profitability and health scores add further assurance that the company has the financial flexibility to maintain the dividend while reinvesting in the business. For income investors, that combination is often more valuable than a double-digit yield that turns out to be temporary.
Free Cash Flow Adds Another Layer of Support
EnerSys also appears in the High Free Cash Flow Stocks screen thanks to strong free cash flow relative to its market price. That reinforces the dividend thesis: a company generating ample cash after reinvestment is better positioned to maintain and grow its payout without relying on debt or financial strain.
Finding More Dividend Candidates
The screen that surfaced EnerSys applies a consistent set of thresholds across the market, including a minimum ChartMill Dividend Rating of 7 and minimum ratings of 5 for both profitability and health. Investors who want to identify other stocks with a similar combination of dependable dividends and sound fundamentals can view the full results of the Best Dividend screen.
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 »