16 Solid Financed Dividend Stocks with Best Yields

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Feb 24, 2012
The level of debt is important for dividend investors. A high leveraged company has problems to finance dividends and growth in the same way. We love stocks with low payout ratios, low debt and strong cash flows. That’s why we made a screen of stocks with very low debt to equity ratios (a value of less than 0.1) with a minimum dividend yield of three percent. Exactly 147 companies fulfilled these criteria but the big part of the results has a small market capitalization and includes a higher risk for a dividend cut. Only 16 stocks have a capitalization over USD2 billion and, six are high yields and an additional six are recommended with a buy or better rating.


Here are my favorite stocks:


1. Paychex (PAYX, Financial) has a market capitalization of $11.35 billion. The company employs 12,400 people, generates revenues of $2,084.30 million and has a net income of $515.30 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $875.10 million. Because of these figures, the EBITDA margin is 41.99 percent (operating margin 37.73 percent and the net profit margin finally 24.72 percent).


The total debt representing 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 35.56 percent was realized. Twelve trailing months earnings per share reached a value of $1.49. Last fiscal year, the company paid $1.24 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 21.09, P/S ratio 5.44 and P/B ratio 7.57. Dividend Yield: 4.09 percent. The beta ratio is 0.84.


2. China Mobile (CHL, Financial) has a market capitalization of $210.20 billion. The company employs 170,019 people, generates revenues of $77,069.73 million and has a net income of $19,063.53 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $37,650.25 million. Because of these figures, the EBITDA margin is 48.85 percent (operating margin 31.07 percent and the net profit margin finally 24.74 percent).


The total debt representing 1.16 percent of the company’s assets and the total debt in relation to the equity amounts to 1.74 percent. Due to the financial situation, a return on equity of 22.10 percent was realized. Twelve trailing months earnings per share reached a value of $4.82. Last fiscal year, the company paid $2.06 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 10.87, P/S ratio 2.74 and P/B ratio 2.30. Dividend Yield: 3.89 percent. The beta ratio is 0.49.


3. American Eagle Outfitters (AEO) has a market capitalization of $2.76 billion. The company employs 6,900 people, generates revenues of $2,967.56 million and has a net income of $181.93 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $456.51 million. Because of these figures, the EBITDA margin is 15.38 percent (operating margin 10.65 percent and the net profit margin finally 6.13 percent).


The total debt representing 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 12.42 percent was realized. Twelve trailing months earnings per share reached a value of $0.95. Last fiscal year, the company paid $0.43 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 14.93, P/S ratio 0.93 and P/B ratio 2.04. Dividend Yield: 3.11 percent. The beta ratio is 1.00.


Take a closer look at the full table of solid financed dividend stocks with best yields. The average P/E ratio amounts to 17.50 and the forward P/E ratio is 16.09. The dividend yield has a value of 4.13 percent. P/B ratio is 3.00 and P/S ratio 2.86. Finally, the operating margin amounts to 22.21 percent.


Related stock ticker symbols:

TEO, NYB, TNH, BPT, CHT, MCY, ENL, PAC, PAYX, CHL, RUK, ASR, CAJ, WSO, GRMN, AEO


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