ANGLOGOLD ASHANTI PLC (NYSE:AU) – A High-Yield Dividend Stock with Strong Financials and Growth Potential

Dividend investors often look for a balance between high yield, sustainability, and financial stability. One way to find such stocks is by using a screening method that selects companies with strong dividend ratings while keeping solid profitability and financial health. This approach helps avoid high-yield traps, stocks with unsustainable payouts due to underlying financial weakness. ANGLOGOLD ASHANTI PLC (NYSE:AU [https://www.chartmill.com/stock/quote/AU/profile]) appears as a candidate from this screen, offering a good mix of yield, growth potential, and financial strength.

[text]

KEY DIVIDEND METRICS

AU stands out for several reasons that fit dividend investment criteria:

*
ATTRACTIVE DIVIDEND YIELD (5.51%)
AU’s yield is almost double the industry average (2.85%) and much higher than the S&P 500’s 2.39%. This places it in the top 6% of its metals and mining peers for yield. High yields can sometimes indicate trouble, but AU’s payout ratio of 39.6% suggests sustainability, as it leaves enough room to reinvest earnings or handle downturns.

*
STRONG DIVIDEND GROWTH (59.59% CAGR OVER 5 YEARS)
While past growth is notable, investors should be aware that AU recently cut its dividend. However, its 10-year history of steady payouts adds trust. Dividend growth is important for long-term investors, as it helps counter inflation and builds returns over time.

*
SUSTAINABLE PAYOUTS
The payout ratio is well below the danger zone (typically >80%), and AU’s strong free cash flow further supports dividend reliability. The company’s ability to generate cash, shown by a debt-to-FCF ratio of just 1.31 (better than 86% of peers), means it can easily cover obligations.

PROFITABILITY AND FINANCIAL HEALTH

Dividend sustainability depends on a company’s ability to generate profits and maintain a strong balance sheet. AU does well here:

*
HIGH PROFITABILITY (RATING: 9/10)
AU’s return on invested capital (19.74%) and profit margins (22.2% net, 35% operating) rank in the top 10% of its industry. These numbers show efficient operations and pricing power, which are key for funding dividends.

*
SOLID FINANCIAL HEALTH (RATING: 8/10)
With a low debt-to-equity ratio (0.29) and strong liquidity (current ratio of 2.99), AU is prepared to handle market downturns. Its Altman-Z score (4.88) signals low bankruptcy risk, an important factor for dividend stability.

VALUATION AND GROWTH

AU trades at a P/E of 16.4, below both its industry (26.2) and the S&P 500 (26.7). Its forward P/E of 11.8 suggests potential upside if earnings meet expectations. While near-term EPS growth is expected to drop (-1.98% annually), revenue is projected to grow at 8.3%, providing a base for future dividend increases.

WHY THESE CRITERIA MATTER

The screening method focuses on:

* HIGH DIVIDEND RATING: Ensures yield and growth potential.
* PROFITABILITY: Confirms earnings can support payouts.
* FINANCIAL HEALTH: Reduces risk of dividend cuts during market stress.

AU meets all three, making it a candidate for investors seeking income with moderate risk. For more details, review AU’s full fundamental analysis report [https://www.chartmill.com/stock/quote/AU/fundamental-analysis].

EXPLORING FURTHER

To find more stocks like AU, check the Best Dividend Stocks screen [https://www.chartmill.com/stock/stock-screener?sid=288&f=p_pg10,v1_50b500,sl_dvd_7_X,sl_he_5_X,sl_pr_5_X&v=19&s=dvd&sd=DESC&cpl=2&bc=false&o1=3&op1=200,16711680&o2=3&op2=50,255&o3=1], which filters for high dividend ratings alongside profitability and health metrics.

_Disclaimer: This article is not investment advice. Conduct your own research or consult a financial advisor before making investment decisions._