What the F-Score says about Somero Enterprises Inc’s (LON:SOM) chunky dividend payment

Somero Enterprises Inc (LON:SOM) has just released its final results and the market has responded positively, with the company's shares up 3.2% to 387p at the time of writing.

Despite consistently strong operating results, Somero is valued at 11.7 times forecast earnings and pays out a rolling 4.87% of its share price in dividend payments. But sometimes a high dividend yield can signal skepticism from the market. Assuming this dividend is safe, and considering the group's trading performance, today's share price could represent an attractive buying opportunity in the manufacturer of laser-guided equipment.

We can do this quickly by seeing how Somero Enterprises stacks up against the Piotroski F-Score.

Why you need to know the Piotroski F-Score

Followers of celebrated accounting professor Joseph Piotroski are well aware of the checklist that made him famous at the turn of the millennium. Piotroski is behind the F-Score: a simple indicator to highlight stocks whose improving financial prospects are not reflected in their share prices.

Somero Enterprises Inc (LON:SOM) scores 9 out of a possible 9. By investing in companies scoring 8 or 9 by these measures, Piotroski showed that, over a 20-year test period through to 1996, the return earned by a value-focused investor could be increased by an astounding 7.5% each year. Even better, it suggests that the company is well-placed to continue to pay out attractive dividends.

What does this mean for potential investors?

Somero Enterprises has an F-Score that suggests it could be a promising investment candidate worthy of further research - but it's only a first step. Higher F-Score stocks can still have weaknesses and may trade at premium prices compared to other stocks. We've identified some areas of concern with Somero Enterprises that you can find out about here.