Updated 3/5/25

AMETEK, Inc. (NYSE: AME) is a well-established name in the industrial technology space, known for its electronic instruments and electromechanical devices. It’s not the flashiest stock, but it has built a solid reputation for steady growth, disciplined management, and strong financials.

For dividend investors, AMETEK doesn’t offer a high yield, but that’s not necessarily a drawback. The company’s approach to dividends focuses more on long-term reliability and growth rather than immediate high payouts. With a low payout ratio, strong free cash flow, and consistent dividend increases, it’s the kind of stock that fits well into a long-term, compounding strategy.

Here’s a closer look at what makes AMETEK an appealing choice for dividend-focused investors.

📊 Key Dividend Metrics

💰 Forward Dividend Yield: 0.67%
📅 Next Dividend Payment: March 31, 2025
📆 Ex-Dividend Date: March 14, 2025
📈 Five-Year Average Dividend Yield: 0.63%
💵 Annual Dividend Per Share: $1.24
🔄 Payout Ratio: 18.89%
🚀 Five-Year Dividend Growth Rate: Around 8-10% annually

Dividend Overview

If you’re looking for high immediate income, AMETEK isn’t going to be your top choice. The dividend yield is below 1%, which is fairly low compared to other dividend stocks. But the real appeal here isn’t the current yield—it’s the growth and sustainability of the dividend over time.

AMETEK has a history of increasing its dividend consistently. The company’s payout ratio sits below 20%, meaning it retains most of its earnings to reinvest in the business while still rewarding shareholders. This is the kind of dividend setup that allows for long-term compounding rather than just high current income.

For those who prefer stable, growing dividends over flashy high-yield stocks, AMETEK checks the right boxes.

Dividend Growth and Safety

One of AMETEK’s standout qualities is its ability to grow its dividend while keeping it extremely safe.

The company has a solid track record of increasing dividends year after year, with an annual growth rate of around 8-10% over the last five years. That’s a strong number for an industrial stock, especially when you consider how well-covered the dividend is by earnings and cash flow.

Since the payout ratio remains below 20%, AMETEK has a lot of flexibility to keep raising dividends without stressing its balance sheet. This is backed by strong free cash flow, which ensures that the company isn’t just paying dividends for the sake of optics but actually supporting them with real earnings power.

Chart Analysis

The price action in AMETEK (AME) over the past year shows a well-defined trend, marked by periods of volatility, consolidation, and breakout momentum. The stock has experienced fluctuations, but the overall structure suggests a steady upward bias, supported by key moving averages and volume patterns.

Moving Averages and Trend Strength

The 50-day simple moving average (SMA) is currently flattening after a strong upward move, while the 200-day SMA is steadily trending higher. Earlier in the year, the stock saw a bullish crossover when the 50-day SMA moved above the 200-day SMA, often a sign of strengthening momentum. However, more recently, price action has been hovering near the 50-day SMA, suggesting a possible period of consolidation.

Recent Price Action and Volume

Looking at the latest candles, the stock closed at $185.04, with a high of $185.75 and a low of $183.02. The last few sessions have seen relatively tight trading ranges, indicating a balance between buyers and sellers at these levels. Volume remains fairly stable, but without a significant spike in buying pressure, suggesting that the stock may need more momentum to push meaningfully higher.

Support and Resistance Levels

The stock found strong support near $170 before rallying to a recent high of around $190. If it can hold above the 50-day SMA, it could attempt another push toward the previous highs. On the downside, the 200-day SMA around $175 acts as a secondary support level, meaning any pullback that stays above this area would likely keep the uptrend intact.

Relative Strength Index (RSI) and Momentum

The RSI has been drifting lower after reaching overbought territory, signaling that momentum has cooled off. It’s now hovering in the mid-range, suggesting neutral conditions rather than strong buying or selling pressure. This supports the idea that the stock is in a consolidation phase rather than a sharp trend reversal.

Key Takeaways from the Last Five Candles

• The most recent candles show small-bodied formations, which often indicate indecision in the market.
• Wicks on both sides of the candles suggest some tug-of-war between buyers and sellers.
• No strong reversal signals have emerged, but without renewed buying pressure, the stock may struggle to break out toward new highs.
• The 50-day SMA is acting as a near-term pivot point, with traders watching for a confirmed breakout or breakdown.

Overall, the stock remains in an uptrend, but the pace has slowed, and short-term consolidation is evident. If momentum returns, the next test will be a break above resistance around $190, while downside support rests in the $175-$180 range.

Analyst Ratings

AMETEK, Inc. (NYSE: AME) has recently seen a mix of upgrades and downgrades from analysts, reflecting both confidence in the company’s long-term growth and caution regarding its valuation.

Upgrades:

• One investment firm raised its rating on AMETEK from “Neutral” to “Buy” and increased the price target from $195 to $225. The firm pointed to the company’s strong financial performance, particularly its ability to generate consistent free cash flow and expand operating margins. The upgrade also highlighted AMETEK’s resilience in industrial markets, which has helped it maintain steady revenue growth despite macroeconomic uncertainties.
• Another major firm upgraded the stock to “Outperform” from “Neutral” with a revised price target of $210, citing better-than-expected earnings and strong execution by management. Analysts noted that AMETEK’s ability to scale its operations while maintaining efficiency gives it an edge over competitors, reinforcing the case for long-term appreciation.

Downgrades:

• One financial institution downgraded AMETEK from “Hold” to “Sell,” arguing that the stock’s valuation had become stretched relative to its earnings growth. The analysts expressed concerns that the market was pricing in too much optimism and that any slowdown in industrial demand could put downward pressure on the stock.
• Another firm maintained a “Hold” rating but lowered its price target from $171 to $166, citing concerns about near-term economic uncertainty and potential softness in AMETEK’s end markets. While the long-term outlook remained intact, analysts were cautious about short-term headwinds that could impact revenue growth.

Consensus Price Target:

Overall, the average analyst price target for AMETEK sits around $210, implying an expected upside of roughly 13% from current levels. While some analysts remain concerned about valuation, the broader consensus sees continued earnings strength and operational efficiency supporting further stock appreciation over time.

Earning Report Summary

AMETEK, Inc. wrapped up its latest quarter with solid numbers, showing resilience and steady growth across its business segments. The company reported another strong performance, continuing its trend of steady revenue gains and improved margins.

Fourth Quarter Performance

The company brought in $1.76 billion in sales, a modest 2% increase from the same time last year. While the growth wasn’t massive, it was steady, reflecting AMETEK’s ability to maintain strong demand even in uncertain market conditions.

Profitability remained a highlight, with operating income climbing to $469 million, up 5% from a year ago. Operating margins also improved, reaching 26.6 percent, signaling that the company is running more efficiently.

Earnings per share came in at $1.67 on a GAAP basis, but adjusted earnings per share hit $1.87, up a solid 11 percent from last year’s fourth quarter. The company also generated $550 million in operating cash flow, with free cash flow conversion exceeding expectations at 129 percent of net income.

Full-Year Results

For the entire year, AMETEK posted $6.94 billion in revenue, up 5 percent from 2023. Earnings per share for the full year came in at $5.93 on a GAAP basis, with adjusted earnings rising 7 percent to $6.83 per share.

Operating income remained strong, coming in at $1.78 billion, making up 25.6 percent of total sales. Adjusted operating income margins ticked up to 26.1 percent, demonstrating solid financial discipline.

Segment Breakdown

The Electronic Instruments Group had mixed results in the fourth quarter. Sales dipped slightly by 2 percent to $1.21 billion, but profitability remained strong. Operating income for the segment hit $386.6 million, up 8 percent year-over-year, with operating margins expanding to 31.8 percent, a record for the segment.

On the other hand, the Electromechanical Group saw an 11 percent jump in sales, reaching $546.7 million in the quarter. The segment’s profitability also improved, with operating income climbing, reflecting strong demand across AMETEK’s end markets.

All in all, AMETEK wrapped up the quarter on a high note. The company’s steady earnings growth, margin expansion, and strong cash flow generation continue to reinforce its reputation as a well-run, financially disciplined business.

Financial Health and Stability

A healthy balance sheet is key to sustainable dividend growth, and AMETEK doesn’t disappoint in this area.

The company maintains a solid profit margin of nearly 20%, along with a high operating margin of 28%. This efficiency helps drive consistent earnings growth, which in turn fuels dividend increases.

Debt levels are reasonable, with total debt of $2.32 billion and a manageable debt-to-equity ratio of 24%. Meanwhile, AMETEK’s cash reserves sit at $374 million, ensuring that it has the liquidity to meet obligations and continue returning capital to shareholders.

Another strong indicator of financial stability is return on equity (ROE), which sits at nearly 15%. This suggests that AMETEK is making good use of shareholder capital and generating solid returns.

All in all, AMETEK’s financials support the idea of a reliable, growing dividend.

Valuation and Stock Performance

At a trailing price-to-earnings (P/E) ratio of 31.2 and a forward P/E of 25.97, AMETEK isn’t exactly a bargain. The stock trades at a premium, largely due to its quality and steady growth.

A price-to-book ratio of 4.42 and a PEG ratio of 2.88 indicate that investors are willing to pay up for this stability. While these numbers suggest the stock may not be undervalued, they also reflect the company’s strong track record and future earnings potential.

Over the past year, AMETEK’s stock has moved between $149.03 and $198.33. With a current price of around $185, it’s closer to the higher end of its range. However, its moving averages suggest a steady upward trend, reinforcing its long-term stability.

For long-term investors, this isn’t necessarily a stock to trade in and out of. It’s more of a buy-and-hold position for those looking for steady capital appreciation alongside growing dividends.

Risks and Considerations

While AMETEK is a strong company, there are a few factors to keep in mind.

1️⃣ The dividend yield is relatively low. If you’re relying on your portfolio for high immediate income, there are better options out there. AMETEK is more about long-term dividend growth than big upfront payouts.

2️⃣ The stock isn’t cheap. With a higher-than-average P/E ratio and a solid history of growth, AMETEK’s stock tends to trade at a premium. Investors buying in now should be aware that short-term volatility could present better buying opportunities down the road.

3️⃣ The industrial sector can be cyclical. While AMETEK serves a diverse range of industries, economic downturns could impact revenue growth. However, its strong financials and diversified business model help mitigate this risk.

4️⃣ Higher interest rates could weigh on valuation. As interest rates remain elevated, premium-priced stocks like AMETEK may see some downward pressure.

Despite these factors, AMETEK remains a resilient company with a strong track record of growth.

Final Thoughts

AMETEK isn’t the kind of stock you buy for a big dividend paycheck today. Instead, it’s a high-quality industrial business with a long runway for growth, a commitment to increasing its dividend, and a solid financial foundation.

For investors looking for dividend safety, consistent growth, and long-term stability, AMETEK is worth considering. While its yield is low, the company makes up for it with steady increases and strong underlying financials.

If your investing approach focuses on growth-oriented dividend stocks that compound over time, AMETEK fits well into that strategy.