The goal of dividend investing is to find and buy dividend growth stocks that will continue to raise their dividends. To pay and raise its dividend a company must generate sufficient free cash flow. However, it is not enough to just generate the cash, it has to be available for dividend payments. Many companies generate significant free cash flow, but often that cash is already spoken for in the form of debt obligations.
This week I am screening my database for low debt-to-total-capital stocks. Debt includes both long-term and short-term debt. Total capital is a combination of debt and shareholders equity. When you divide debt by total capital a desirable rate is something less than 35%, but I will consider rates up to 50% on a short-term basis. Obviously, this is not a buy list but a potential idea list that will require additional due diligence.
Below are 13 stocks with debt that have a low debt-to-total-capital ratio:
- 9.6% Chevron Corporation (CVX) | Yield: 3.0%
- 9.1% UGI Corporation (UGI) | Yield: 3.2%
- 9.0% Exxon Mobil Corporation (XOM) | Yield: 2.2%
- 8.4% HCC Insurance Holdings Inc. (HCC) | Yield: 1.8%
- 8.2% SEI Investments Corp. (SEI) | Yield: 0.9%
- 7.2% Badger Meter, Inc. (BMI) | Yield: 1.5%
- 4.1% Intel Corporation (INTC) | Yield: 3.5%
- 4.0% UMB Financial Corporation (UMBF) | Yield: 1.9%
- 2.7% Weyco Group, Inc. (WEYS) | Yield: 3.4%
- 3.0% AFLAC Incorporated (BPL) | Yield: 2.5%
- 2.1% Clarcor Inc. Comm (CLC) | Yield: 1.0%
- 1.2% Tootsie Roll Industries Inc. (TR) | Yield: 1.1%
- 0.6% Automatic Data Processing Inc. (ADP) | Yield: 2.6%
The data present above is in its raw form. Many of the companies I would disqualify due to a low yield. However some of the others may be worth a second look.
My database, D4L-Data, is an Open Office spreadsheet containing more than 20 columns of information on the 200+ companies that I track. The data is sortable and has built-in buttons and macros to make it easy to use. Companies included in the list are those that have had a history of dividend growth. The D4L-Data spreadsheet is a part of D4L-Premium Services and is updated each Saturday for subscribers.
Full Disclosure: Long ADP, INTC. See a list of all my income holdings here.
- Don't Touch These 5 Dividend Stocks!
- 3 Dividend Stocks That I Will NEVER Lose Money On
- List of 195 Dividend Stocks Every Income Investor Should Know About
- These 11 Dividend Stocks Could Make You Wealthy
- 13 Dividend Stocks Headed In The Right Direction
Tags: [ADP] [TR] [CLC] [AFL] [WEYS] [UMBF] [INTC] [BMI] [SEIC] [HCC] [XOM] [UGI] [CVX]
Popular Posts - Last 7 days
Presented below are my dividend stock and ETF/CEF holdings. This is not a recommendation to buy these securities. I have classified some of...
Once again it is time for a goals/progress update. I am pleased to report that annualized dividend income increased in November, extending ...
Simple interest is where interest is calculated on the original principal amount and unpaid interest is not added to the principal for futur...
Each Sunday I highlight any notable articles that I came across over the past week, along with any Carnivals I participated in. For those re...
Throughout history there have always been great companies that stand head-and-shoulders above their peers and the competition. They are lov...
Linked here is a detailed quantitative analysis of Cardinal Health, Inc. (CAH). Below are some highlights from the above linked analysis: ...
Linked here is a detailed quantitative analysis of Realty Income Corp. (O). Below are some highlights from the above linked analysis: Com...
Monday, October 31, 2011 will mark my fourth full year of writing as Dividends4Life . It is hard to believe another year has passed. Like th...
Like many that came before me, I am on a journey to construct a portfolio that will provide me... Dividends 4 Life
In an utopian world, the perfect dividend stock would be one that is both high-yield and provide a high dividend growth rate. Its share pri...