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20 Dividend Challengers with Dividend Growth Potential and Very Low Debt

Stocks with a history of rising dividends of more than five years but less than 10 years in a row are named Dividend Challengers. 189 companies with such a dividend growth performance are available at the markets. But past dividend growth does not guarantee a future dividend hike if earnings are down. An important ratio to judge the ability of a company to pay dividends from capital assets is the debt-to-equity ratio.

I screened all Dividend Challengers by companies with very low debt-to-equity ratios (below 0.1). Those stocks are nearly free of debt and have a generous cushion for future dividend hikes. Below are the results of some of the stocks with very low market capitalization which are recommended for deeper analysis. Twenty stocks with a market capitalization of more than USD300 million remained. Twelve of them have a current buy or better rating.

Here are my favorite stocks:

Guess? (GES) has a market capitalization of $2.38 billion. The company employs 14,300 people, generates revenues of $2,688.05 million and has a net income of $270.65 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $476.52 million. Because of these figures, the EBITDA margin is 17.73 percent (the operating margin is 14.78 percent and the net profit margin is 10.07 percent).

Financial Analysis

The total debt representing 0.66 percent of the company’s assets and the total debt in relation to the equity amounts to 1.04 percent. Due to the financial situation, a return on equity of 23.62 percent was realized. Twelve trailing months earnings per share reached $2.87. Last fiscal year, the company paid $0.80 in dividends to shareholders. GES raised dividends for six consecutive years.

Market Valuation

Here are the price ratios of the company: The P/E ratio is 9.23, the P/S ratio is 0.99 and the P/B ratio is 2.25. Dividend Yield: 2.71 percent. Beta ratio: 1.65.

Accenture (ACN) has a market capitalization of $41.04 billion. The company employs 244,000 people, generates revenues of $27,352.91 million and has a net income of $2,553.24 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,983.71 million. Because of these figures, the EBITDA margin is 14.56 percent (operating margin 12.69 percent and the net profit margin finally 9.33 percent).

Financial Analysis: The total debt representing 0.03 percent of the company’s assets and the total debt in relation to the equity amounts to 0.11 percent. Due to the financial situation, a return on equity of 67.84 percent was realized. Twelve trailing months earnings per share reached a value of $3.77. Last fiscal year, the company paid $0.90 in dividends to shareholders. ACN raised dividends for six consecutive years.

Market Valuation

Here are the price ratios of the company: The P/E ratio is 15.74, the P/S is ratio 1.65 and the P/B ratio is 11.44. Dividend Yield: 2.10 percent. Beta ratio: 0.81.

DeVry (DV) has a market capitalization of $2.03 billion. The company employs 10,262 people, generates revenues of $2,182.37 million and has a net income of $330.83 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $558.75 million. Because of these figures, the EBITDA margin is 25.60 percent (the operating margin is 22.64 percent and the net profit margin is 15.16 percent).

Financial Analysis: The total debt represent zero percent of the company’s assets and the total debt in relation to the equity amounts to 0 percent. Due to the financial situation, a return on equity of 25.72 percent was realized. Twelve trailing months earnings per share reached a value of $3.03. Last fiscal year, the company paid $0.24 in dividends to shareholders. DV raised dividends for six consecutive years.

Market Valuation

Here are the price ratios of the company: The P/E ratio is 10.23, P/S ratio 0.95 and P/B ratio 1.55. Dividend Yield: 0.95 percent. The beta ratio is 0.54.

Take a closer look at the full table of Dividend Challengers with lowest debt. The average price to earnings ratio (P/E ratio) amounts to 18.08. The dividend yield is 1.73 percent. The P/B is 4.39 and P/S is 2.85. The operating margin is 21.43 percent.

Related stock ticker symbols:

CHL, KDN, GES, DAKT, NHC, WSM, CAN, NRCI, HWKN, COLM, MSM, EPHC, FINL, DV, JJSF, ATRI, LNN, RBN, TPL, GOLD

Selected Articles:

· 12 Dividend Challengers With Highest Recent Growth

· Best Recommended High Yield Dividend Challengers

· 14 Dividend Challengers For Less Than Book Value

· 12 Dividend Challengers With Low PEG Ratios

About the author:

Dividend
I am a private full time investor searching for investments and investment ideas.

Visit Dividend's Website


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