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8 Stocks With Nearly Safe Dividends

A good example how debt destroys the dreams of dividend growth investors is Tesco. The company cut its dividend payments yesterday by 75 percent. 

The major reasons for the trigger were worsening earnings as well as a high debt burden. 

Warren Buffett also bought a small stake in Tesco a few years ago and most of us thought it was a safe haven but as I saw the huge debt amount of 10 billion British pounds, I was shocked. Am I wrong? Did I oversee something my analysis? No! Now we see the bitter result of a weakening business with high debt.


Quick Tesco Income Statement
Source: MSN Money

I personally love companies with strong growth and low debt ratios. In my blog I've also often published hundreds of stock ideas and some of them performed very well.

The market is full of high dividend payer with a big long-term debt portfolio. Below are eight large cap dividend stocks with very low debt-to-equity ratios.

I've focused my thoughts on stocks with a yield over 2 percent but you must consider the full amount of cash which the company owns. The higher the cash per share, the better the premium you can pay but in the end, it’s the operational business that drives the stock up or down.



Only a good growing company with better developing business perspectives can lift up your asset. I know that it is hard to look into the future and nobody has the ability to do this but with a small piece of unclouded thoughts, your investment should become a clear target or trash.

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8 solid dividend stocks with very low debt in order to avoid dividend cuts in the future are...

Canon (NYSE:CAJ) has a market capitalization of $43.57 billion. The company employs 194,151 people, generates revenue of $35,861.41 million and has a net income of $2,301.93 million. Canon’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5,886.11 million. The EBITDA margin is 16.41 percent (the operating margin is 9.04 percent and the net profit margin 6.42 percent).

Financial Analysis: The total debt represents 0.25 percent of Canon’s assets and the total debt in relation to the equity amounts to 0.37 percent. Due to the financial situation, a return on equity of 8.37 percent was realized by Canon. Twelve trailing months earnings per share reached a value of $2.16. Last fiscal year, Canon paid $1.25 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.14, the P/S ratio is 1.21 and the P/B ratio is finally 1.32. The dividend yield amounts to 3.83 percent and the beta ratio has a value of 0.93.


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Long-Term Stock Price Chart Of Canon (CAJ)
Long-Term Dividend Payment History of Canon (CAJ)
Long-Term Dividend Yield History of Canon (CAJ)

Coach (NYSE:COH) has a market capitalization of $10.11 billion. The company employs 17,200 people, generates revenue of $4,806.23 million and has a net income of $781.34 million. Coach’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,294.81 million. The EBITDA margin is 26.94 percent (the operating margin is 23.30 percent and the net profit margin 16.26 percent).

Financial Analysis: The total debt represents 3.84 percent of Coach’s assets and the total debt in relation to the equity amounts to 5.80 percent. Due to the financial situation, a return on equity of 32.35 percent was realized by Coach. Twelve trailing months earnings per share reached a value of $2.78. Last fiscal year, Coach paid $1.35 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.25, the P/S ratio is 2.10 and the P/B ratio is finally 4.17. The dividend yield amounts to 3.67 percent and the beta ratio has a value of 1.15.


Long-Term Stock Price Chart Of Coach (COH)
Long-Term Dividend Payment History of Coach (COH)
Long-Term Dividend Yield History of Coach (COH)


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Paychex (NASDAQ:PAYX) has a market capitalization of $15.12 billion. The company employs 12,700 people, generates revenue of $2,518.90 million and has a net income of $627.50 million. Paychex’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,087.70 million. The EBITDA margin is 43.18 percent (the operating margin is 39.01 percent and the net profit margin 24.91 percent).

Financial Analysis: The total debt represents 0.00 percent of Paychex’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 35.35 percent was realized by Paychex. Twelve trailing months earnings per share reached a value of $1.71. Last fiscal year, Paychex paid $1.40 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.30, the P/S ratio is 6.00 and the P/B ratio is finally 8.51. The dividend yield amounts to 3.65 percent and the beta ratio has a value of 0.95.


Long-Term Stock Price Chart Of Paychex (PAYX)
Long-Term Dividend Payment History of Paychex (PAYX)
Long-Term Dividend Yield History of Paychex (PAYX)

China Mobile (NYSE:CHL) has a market capitalization of $253.33 billion. The company employs 197,030 people, generates revenue of $102,584.60 million and has a net income of $19,827.93 million. China Mobile’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $39,475.34 million. The EBITDA margin is 38.48 percent (the operating margin is 21.53 percent and the net profit margin 19.33 percent).

Financial Analysis: The total debt represents 0.43 percent of China Mobile’s assets and the total debt in relation to the equity amounts to 0.64 percent. Due to the financial situation, a return on equity of 16.09 percent was realized by China Mobile. Twelve trailing months earnings per share reached a value of $4.65. Last fiscal year, China Mobile paid $2.11 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.39, the P/S ratio is 2.47 and the P/B ratio is finally 1.95. The dividend yield amounts to 3.27 percent and the beta ratio has a value of 0.10.


Long-Term Stock Price Chart Of China Mobile (CHL)
Long-Term Dividend Payment History of China Mobile (CHL)
Long-Term Dividend Yield History of China Mobile (CHL)

Public Storage (NYSE:PSA) has a market capitalization of $30.24 billion. The company employs 5,200 people, generates revenue of $1,981.75 million and has a net income of $1,057.53 million. Public Storage’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,349.91 million. The EBITDA margin is 68.12 percent (the operating margin is 48.57 percent and the net profit margin 53.36 percent).

Financial Analysis: The total debt represents 8.50 percent of Public Storage’s assets and the total debt in relation to the equity amounts to 9.54 percent. Due to the financial situation, a return on equity of 16.11 percent was realized by Public Storage. Twelve trailing months earnings per share reached a value of $5.02. Last fiscal year, Public Storage paid $5.15 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 34.91, the P/S ratio is 15.26 and the P/B ratio is finally 5.76. The dividend yield amounts to 3.20 percent and the beta ratio has a value of 0.77.


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Long-Term Stock Price Chart Of Public Storage (PSA)
Long-Term Dividend Payment History of Public Storage (PSA)
Long-Term Dividend Yield History of Public Storage (PSA)

CME Group (NASDAQ:CME) has a market capitalization of $25.72 billion. The company employs 2,730 people, generates revenue of $2,936.30 million and has a net income of $978.10 million. CME Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,875.10 million. The EBITDA margin is 63.86 percent (the operating margin is 55.75 percent and the net profit margin 33.31 percent).

Financial Analysis: The total debt represents 5.26 percent of CME Group’s assets and the total debt in relation to the equity amounts to 13.51 percent. Due to the financial situation, a return on equity of 4.59 percent was realized by CME Group. Twelve trailing months earnings per share reached a value of $2.86. Last fiscal year, CME Group paid $1.80 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 26.73, the P/S ratio is 8.76 and the P/B ratio is finally 1.21. The dividend yield amounts to 2.46 percent and the beta ratio has a value of 1.08.


Long-Term Stock Price Chart Of CME Group (CME)
Long-Term Dividend Payment History of CME Group (CME)
Long-Term Dividend Yield History of CME Group (CME)

Accenture (NYSE:ACN) has a market capitalization of $54.40 billion. The company employs 257,000 people, generates revenue of $30,394.29 million and has a net income of $3,554.52 million. Accenture’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,659.67 million. The EBITDA margin is 15.33 percent (the operating margin is 14.27 percent and the net profit margin 11.69 percent).

Financial Analysis: The total debt represents 0.15 percent of Accenture’s assets and the total debt in relation to the equity amounts to 0.52 percent. Due to the financial situation, a return on equity of 72.08 percent was realized by Accenture. Twelve trailing months earnings per share reached a value of $4.24. Last fiscal year, Accenture paid $1.62 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.11, the P/S ratio is 1.79 and the P/B ratio is finally 10.89. The dividend yield amounts to 2.29 percent and the beta ratio has a value of 1.21.


Long-Term Stock Price Chart Of Accenture (ACN)
Long-Term Dividend Payment History of Accenture (ACN)
Long-Term Dividend Yield History of Accenture (ACN)

QUALCOMM (NASDAQ:QCOM) has a market capitalization of $127.55 billion. The company employs 31,000 people, generates revenue of $24,866.00 million and has a net income of $6,845.00 million. QUALCOMM’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,578.00 million. The EBITDA margin is 34.50 percent (the operating margin is 28.78 percent and the net profit margin 27.53 percent).

Financial Analysis: The total debt represents 0.04 percent of QUALCOMM’s assets and the total debt in relation to the equity amounts to 0.05 percent. Due to the financial situation, a return on equity of 19.69 percent was realized by QUALCOMM. Twelve trailing months earnings per share reached a value of $4.15. Last fiscal year, QUALCOMM paid $1.20 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.32, the P/S ratio is 5.13 and the P/B ratio is finally 3.55. The dividend yield amounts to 2.21 percent and the beta ratio has a value of 1.19.


Long-Term Stock Price Chart Of QUALCOMM (QCOM)
Long-Term Dividend Payment History of QUALCOMM (QCOM)
Long-Term Dividend Yield History of QUALCOMM (QCOM)


Do you like this article? If yes, please support us and hit the button for a Facebook Like, make a tweet or post a comment in the Dividend Yield community! Thank you so much, we really appreciate it.

How do you prevent dividend cuts? Do you look at debt or earnings developments? Please let me know your kind of analysis and leave a small comment below. Thank you.

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*I am long CHL, ACN, COH, CME. 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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1 comment:

  1. Nice article. Do you use a online screener to find the stocks?

    ReplyDelete

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