3 Buy-Rated Dividend Stocks
Lexmark International (NYSE: LXK) shares currently have a dividend yield of 4.30%. Lexmark International, Inc. develops, manufactures, and supplies printing and imaging solutions for offices. It offers laser printers, inkjet printers, and multifunction devices, as well as cartridges and other supplies, services, and solutions. The company has a P/E ratio of 20.42. The average volume for Lexmark International has been 1,267,600 shares per day over the past 30 days. Lexmark International has a market cap of $1.8 billion and is part of the computer hardware industry. Shares are up 25.1% year to date as of the close of trading on Monday. TheStreet Ratings rates Lexmark International as a buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself. Highlights from the ratings report include:
- LEXMARK INTL INC's earnings per share declined by 35.7% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, LEXMARK INTL INC reported lower earnings of $1.49 versus $4.11 in the prior year. This year, the market expects an improvement in earnings ($3.80 versus $1.49).
- LXK, with its decline in revenue, underperformed when compared the industry average of 10.4%. Since the same quarter one year prior, revenues fell by 10.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.55, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.39 is sturdy.
- 38.80% is the gross profit margin for LEXMARK INTL INC which we consider to be strong. Regardless of LXK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LXK's net profit margin of 3.92% is significantly lower than the industry average.
- The share price of LEXMARK INTL INC has not done very well: it is down 6.60% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
- You can view the full Lexmark International Ratings Report.
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