Top Dividend Growth Stock: #15 Roper

We are counting down the Top Dividend Growth Stocks! Coming in at #15 is Roper (ROP). Roper makes software and control systems for large institutions. It also makes precision testing instruments, dispensers and metering pumps; control valves; medical devices; products and services for water and gas utilities; and equipment and consumables. Based in Sarasota, Florida, Roper Technologies, Inc. was incorporated in 1981.

Roper Technologies Inc (ROP) is Fully Certified, passing ALL Dividend System criteria. It has ‘Premier’ status being in the upper percentiles of this month’s stock universe. The company increased dividends for 29 years, making it a Dividend Aristocrat 25+. We consider ROP to be a Growth stock.

GROWTH:  ROP’s 5-year average dividend growth rate is 19.3%, wonderfully high versus the dividend universe average of 12.4%. Free cash flow has grown at an average rate of 11% per year for the last 5 years versus the dividend universe at 8.3%, so ROP is doing nicely.

INCOME: ROP’s current dividend yield is .51%, less than half of the average at 2.65%. 

SAFETY: We use the Dividend Coverage Ratio to measure the dividend’s safety – higher is better. ROP has a DCR of 6.4 which is excellent, well above the minimum of 2. 

VALUATION: The price at time of analysis was $404.7, which we consider Overpriced. A fair price based on historical PE ratio and earnings would be around $228.18. The S&P500’s average PE ratio is 38.42, versus ROP’s PE ratio of 45.1,  around from 1% to 25% over the S&P 500 average PE. Our ‘Value Rating’ for Roper Technologies Inc is .5 out of 5.0, meaning that  both PS and PE indicate the stock is very expensive, compared to other dividend stocks available.

TIMING: Historical Yield and PE tell us that ROP has ‘No ‘buy’ signal.’ Don’t eliminate a stock based on one factor (or lack thereof). 

QUALITY: Our quality formula gives ROP a ‘Quality Rating’ of 4.3 (out of 5), versus the average of 2.7 for this month’s dividend universe.

Compared to all dividend stocks paying 7 years or more of increasing dividends, we rate Roper Technologies Inc a ‘A-.’

Would you rope in Roper for your portfolio? Let us know in the comments section!

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