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10 Dividend Champions With Very Low Payout Ratios - The Next Big Dividend Grower?

Dividend Champions with low payout ratios and small debt figures originally published at long-term-investments.blogspot.com. Dividend Champions are stocks with a very long history of consecutive dividend hikes. They have achieved to boost dividends year over year for more than 25 years without an interruption.

Only 105 stocks have managed this very important goal for long-term dividend growth investors. I like those stocks but some of them have a really high dividend payout ratio.

Earlier, I talked about the importance of the dividend growth rate and that it would be better to buy lower yielding stocks with a much higher growth rate than stocks with very big yields. Two main criteria for future dividend growth are the debt ratios and dividend payout figures.


This month, I started an article serial about dividend stocks with potential to boost dividends. Today I would like to present you Dividend Champions with the lowest dividend payouts. Only 10 income growth firms have a payout ratio of less than 20 percent. Seven of them are currently recommended to buy.


Most of them are modestly leveraged. Not low but also not too high but the right leverage ratio is also a question of the business model and the strong cash-flow of a corporate as well as the costs for growth.


Here the top yielding stocks:
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Helmerich & Payne (NYSE:HP) has a market capitalization of $7.85 billion. The company employs 9,410 people, generates revenue of $3.151 billion and has a net income of $573.61 million. Helmerich & Payne’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.277 billion. The EBITDA margin is 40.55 percent (the operating margin is 28.86 percent and the net profit margin 18.20 percent).


Financial Analysis: The total debt represents 4.11 percent of Helmerich & Payne’s assets and the total debt in relation to the equity amounts to 6.13 percent. Due to the financial situation, a return on equity of 16.08 percent was realized by Helmerich & Payne. Twelve trailing months earnings per share reached a value of $6.57. Last fiscal year, Helmerich & Payne paid $0.28 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 11.21, the P/S ratio is 2.43 and the P/B ratio is finally 1.98. The dividend yield amounts to 2.78 percent and the beta ratio has a value of 1.30.


Long-Term Stock Price Chart Of Helmerich & Payne (HP)
Long-Term Dividend Payment History of Helmerich & Payne (HP)
Long-Term Dividend Yield History of Helmerich & Payne (HP)

AFLAC (NYSE:AFL) has a market capitalization of $29.64 billion. The company employs 8,673 people, generates revenue of $25.364 billion and has a net income of $2.866 billion. AFLAC’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.747 billion. The EBITDA margin is 22.66 percent (the operating margin is 16.96 percent and the net profit margin 11.30 percent).

Financial Analysis: The total debt represents 3.32 percent of AFLAC’s assets and the total debt in relation to the equity amounts to 27.24 percent. Due to the financial situation, a return on equity of 19.82 percent was realized by AFLAC. Twelve trailing months earnings per share reached a value of $7.20. Last fiscal year, AFLAC paid $1.34 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.85, the P/S ratio is 1.16 and the P/B ratio is finally 1.85. The dividend yield amounts to 2.21 percent and the beta ratio has a value of 2.17.


Long-Term Stock Price Chart Of AFLAC (AFL)
Long-Term Dividend Payment History of AFLAC (AFL)
Long-Term Dividend Yield History of AFLAC (AFL)

McGraw Hill Financial (NYSE:MHFI) has a market capitalization of $18.17 billion. The company employs 21,687 people, generates revenue of $4.450 billion and has a net income of $726.00 million. McGraw Hill Financial’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.401 billion. The EBITDA margin is 31.48 percent (the operating margin is 27.21 percent and the net profit margin 16.31 percent).

Financial Analysis: The total debt represents 17.81 percent of McGraw Hill Financial’s assets and the total debt in relation to the equity amounts to 163.75 percent. Due to the financial situation, a return on equity of 59.43 percent was realized by McGraw Hill Financial. Twelve trailing months earnings per share reached a value of $2.63. Last fiscal year, McGraw Hill Financial paid $1.02 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.06, the P/S ratio is 4.12 and the P/B ratio is finally 24.24. The dividend yield amounts to 1.68 percent and the beta ratio has a value of 1.09.


Long-Term Stock Price Chart Of McGraw Hill Financial (MHFI)
Long-Term Dividend Payment History of McGraw Hill Financial (MHFI)
Long-Term Dividend Yield History of McGraw Hill Financial (MHFI)

Dover (NYSE:DOV) has a market capitalization of $15.18 billion. The company employs 35,000 people, generates revenue of $8.104 billion and has a net income of $833.12 million. Dover’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.798 billion. The EBITDA margin is 22.19 percent (the operating margin is 15.61 percent and the net profit margin 10.28 percent).

Financial Analysis: The total debt represents 26.81 percent of Dover’s assets and the total debt in relation to the equity amounts to 56.92 percent. Due to the financial situation, a return on equity of 16.92 percent was realized by Dover. Twelve trailing months earnings per share reached a value of $5.32. Last fiscal year, Dover paid $1.33 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.71, the P/S ratio is 1.90 and the P/B ratio is finally 3.20. The dividend yield amounts to 1.66 percent and the beta ratio has a value of 1.31.


Long-Term Stock Price Chart Of Dover (DOV)
Long-Term Dividend Payment History of Dover (DOV)
Long-Term Dividend Yield History of Dover (DOV)

Take a closer look at the full list of Dividend Champions with lowest dividend payout ratios. The average P/E ratio amounts to 18.14 and forward P/E ratio is 15.30. The dividend yield has a value of 1.49 percent. Price to book ratio is 4.69 and price to sales ratio 2.06. The operating margin amounts to 19.19 percent and the beta ratio is 1.29. Stocks from the list have an average debt to equity ratio of 0.49.

Here is the full table with some fundamentals (TTM):

Dividend Champions With Low Payout Ratios (Click to enlarge)

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Related Stock Ticker Symbols:
HP, AFL, MHFI, DOV, FDO, PPG, SCL, NDSN, FUL, BEN

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*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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