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18 Services Stocks With Low Debt And Payout Ratios To Boost Future Dividends

Services dividend paying stocks with low payout ratios and relatively small debt figures originally published at long-term-investments.blogspot.com. Today I would like to continue my article serial about low leveraged stocks with small payout ratios. I believe that those stocks can pay higher dividends in the future or they have the ability to grow further without capital increases.

The services sector ha s many corporate stocks with small dividend payouts but the most of the stocks are working with small profit margins or they have a modest capitalization. I decided to look only at stocks with more than $2 billion market capitalization in order to get the best results. My other criteria are still the same: Debt to equity under 0.5 with a dividend payout ratio of less than 20 percent.

Eighteen stocks fulfilled the above mentioned criteria of which ten are currently recommended to buy.

Here are my favorite stocks:
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TJX Companies (NYSE:TJX) has a market capitalization of $39.60 billion. The company employs 179,000 people, generates revenue of $25.878 billion and has a net income of $1.906 billion. TJX Companies’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.615 billion. The EBITDA margin is 13.97 percent (the operating margin is 11.89 percent and the net profit margin 7.37 percent).

Financial Analysis: The total debt represents 8.14 percent of TJX Companies’s assets and the total debt in relation to the equity amounts to 21.13 percent. Due to the financial situation, a return on equity of 55.47 percent was realized by TJX Companies. Twelve trailing months earnings per share reached a value of $2.72. Last fiscal year, TJX Companies paid $0.46 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.39, the P/S ratio is 1.56 and the P/B ratio is finally 11.13. The dividend yield amounts to 1.03 percent and the beta ratio has a value of 0.55.

Long-Term Stock Price Chart Of TJX Companies (TJX)
Long-Term Dividend Payment History of TJX Companies (TJX)
Long-Term Dividend Yield History of TJX Companies (TJX)

PetSmart (NASDAQ:PETM) has a market capitalization of $7.84 billion. The company employs 24,000 people, generates revenue of $6.758 billion and has a net income of $373.56 million. PetSmart’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $889.62 million. The EBITDA margin is 13.16 percent (the operating margin is 9.64 percent and the net profit margin 5.53 percent).

Financial Analysis: The total debt represents 20.74 percent of PetSmart’s assets and the total debt in relation to the equity amounts to 46.83 percent. Due to the financial situation, a return on equity of 34.21 percent was realized by PetSmart. Twelve trailing months earnings per share reached a value of $3.87. Last fiscal year, PetSmart paid $0.64 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.53, the P/S ratio is 1.17 and the P/B ratio is finally 7.12. The dividend yield amounts to 1.03 percent and the beta ratio has a value of 0.41.

Long-Term Stock Price Chart Of PetSmart (PETM)
Long-Term Dividend Payment History of PetSmart (PETM)
Long-Term Dividend Yield History of PetSmart (PETM)

FedEx (NYSE:FDX) has a market capitalization of $36.00 billion. The company employs 112,000 people, generates revenue of $44.287 billion and has a net income of $1.561 billion. FedEx’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5.538 billion. The EBITDA margin is 12.50 percent (the operating margin is 5.76 percent and the net profit margin 3.52 percent).

Financial Analysis: The total debt represents 8.91 percent of FedEx’s assets and the total debt in relation to the equity amounts to 17.19 percent. Due to the financial situation, a return on equity of 9.72 percent was realized by FedEx. Twelve trailing months earnings per share reached a value of $5.01. Last fiscal year, FedEx paid $0.56 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.68, the P/S ratio is 0.82 and the P/B ratio is finally 2.10. The dividend yield amounts to 0.52 percent and the beta ratio has a value of 1.35.

Long-Term Stock Price Chart Of FedEx (FDX)
Long-Term Dividend Payment History of FedEx (FDX)
Long-Term Dividend Yield History of FedEx (FDX)

Family Dollar Stores (NYSE:FDO) has a market capitalization of $8.12 billion. The company employs 33,000 people, generates revenue of $9.331 billion and has a net income of $422.24 million. Family Dollar Stores’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $904.10 million. The EBITDA margin is 9.69 percent (the operating margin is 7.37 percent and the net profit margin 4.53 percent).

Financial Analysis: The total debt represents 16.23 percent of Family Dollar Stores’s assets and the total debt in relation to the equity amounts to 42.19 percent. Due to the financial situation, a return on equity of 35.41 percent was realized by Family Dollar Stores. Twelve trailing months earnings per share reached a value of $3.64. Last fiscal year, Family Dollar Stores paid $0.60 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.42, the P/S ratio is 0.89 and the P/B ratio is finally 6.45. The dividend yield amounts to 1.43 percent and the beta ratio has a value of 0.30.

Long-Term Stock Price Chart Of Family Dollar Stores (FDO)
Long-Term Dividend Payment History of Family Dollar Stores (FDO)
Long-Term Dividend Yield History of Family Dollar Stores (FDO)

Take a closer look at the full list of services stocks with low dividend payout and debt ratios. The average P/E ratio amounts to 18.44 and forward P/E ratio is 15.14. The dividend yield has a value of 1.09 percent. Price to book ratio is 3.83 and price to sales ratio 1.80. The operating margin amounts to 12.64 percent and the beta ratio is 1.25. Stocks from the list have an average debt to equity ratio of 0.21.

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

Services Dividend Potentials (Click to enlarge)

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Related Stock Ticker Symbols:
GLNG, GSH, MGA, FDO, CHS, LUV, TJX, PETM, PIR, ROST, SIG, FDX, TW, MMS, DDS, AAP, WAB, AAN

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*I am long ACN. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: 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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