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These 7 Dividend Cash Cows Produce Money Like Milk (Part I)

Investing is great. You can spend money on stocks and if your bet goes wild you will make a lot of money. That's a great dream for all of us and I can tell you that it's possible to become an investment Pro.

I'm a guy who looks steadily at stocks and try to find attractive investment stories and cheap stocks in order to make a good return.

I'm not short term focused; plan to hold most of my stocks over years and decades. Due to my long investment horizon, I need good companies that grow over time their business, pay me good dividends, and grow dividends as well.

But the most important question is that the corporate can grow without taking new investors on board. Those actions will grow outstanding shares in general and bring pressure on earnings per share growth.

I look for companies have generated high free cash flows, companies with a business model that don't need much money to keep their operational business alive.

I've tried to find some new ideas with an old screener who has a quick option; it’s called the reinvestment rate. I don't know how they calculate this ratio but when I sort the list of large with high margins by this ratio, companies with low investment spending on their operational cash flow come first.

Big Money Roll In Your Pocket

I talk about companies with a high scalable business, stocks with the lowest need of capital expenditures. First you might think about Facebook or all the great tobacco companies. For sure those shares generate big free cash flows.

But there are much more companies, I talk about technology stocks and money platforms. The key is here the platform business. Each new customer doesn't cause new costs and bring free cash into the corporate. That's a great idea of making money.

The only item to care about is market entry barriers. Can competitors easily enter and push down margins? If yes, keep your fingers away of buy only at low multiples.

Below are seven detailed stocks. I will follow up with 8 additional stocks. That's only a selection; there are much more companies available. Some of them pay no dividends other a low one but dividend is not the key.

Look at Part II here: These 8 Dividend Stocks Bubbling Cash Like Lava Gold Mines (Part II)

Most of the presented results come from the tech and financial space.


7 Dividend Stocks with strong free cashflows are...



Reynolds American (NYSE:RAI) has a market capitalization of $31.32 billion. The company employs 5,200 people, generates revenue of $8,236.00 million and has a net income of $1,718.00 million. Reynolds American’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,267.00 million. The EBITDA margin is 39.67 percent (the operating margin is 38.03 percent and the net profit margin 20.86 percent).

RAI has a 2013 casflow from operations of $1.3 billion while CAPEX amounted to $113 million.

Financial Analysis: The total debt represents 33.11 percent of Reynolds American’s assets and the total debt in relation to the equity amounts to 98.68 percent. Due to the financial situation, a return on equity of 32.96 percent was realized by Reynolds American. Twelve trailing months earnings per share reached a value of $2.91. Last fiscal year, Reynolds American paid $2.48 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.28, the P/S ratio is 3.80 and the P/B ratio is finally 6.14. The dividend yield amounts to 4.55 percent and the beta ratio has a value of 0.47.



Long-Term Stock Price Chart Of Reynolds American (RAI)
Long-Term Dividend Payment History of Reynolds American (RAI)
Long-Term Dividend Yield History of Reynolds American (RAI)

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Philip Morris International (NYSE:PM) has a market capitalization of $133.48 billion. The company employs 91,100 people, generates revenue of $31,217.00 million and has a net income of $8,872.00 million. Philip Morris International’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $14,707.00 million. The EBITDA margin is 47.11 percent (the operating margin is 43.29 percent and the net profit margin 28.42 percent).


PM has a 2013 casflow from operations of $10.13 billion while CAPEX amounted to $2.68 billion.


Financial Analysis: The total debt represents 72.52 percent of Philip Morris International’s assets. Twelve trailing months earnings per share reached a value of $3.85. Last fiscal year, Philip Morris International paid $3.58 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.18, the P/S ratio is 4.28 and the P/B ratio is finally not calculable. The dividend yield amounts to 4.40 percent and the beta ratio has a value of 0.91.



Long-Term Stock Price Chart Of Philip Morris International (PM)
Long-Term Dividend Payment History of Philip Morris International (PM)
Long-Term Dividend Yield History of Philip Morris International (PM)

Paychex (NASDAQ:PAYX) has a market capitalization of $15.37 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).


Paychex has a 2013 casflow from operations of $800 million while CAPEX, excluded by acquistions, investments and other changes amounted to $95.4 million.


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 24.70, the P/S ratio is 6.10 and the P/B ratio is finally 8.65. The dividend yield amounts to 3.59 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)

Cisco Systems (NASDAQ:CSCO) has a market capitalization of $128.07 billion. The company employs 66,639 people, generates revenue of $47,142.00 million and has a net income of $7,853.00 million. Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $12,195.00 million. The EBITDA margin is 25.87 percent (the operating margin is 19.82 percent and the net profit margin 16.66 percent).


Cisco has a 2013 casflow from operations of $12.894 billion while CAPEX, excluded by acquistions and investments amounted to $1.16 billion.


Financial Analysis: The total debt represents 19.89 percent of Cisco Systems’s assets and the total debt in relation to the equity amounts to 36.90 percent. Due to the financial situation, a return on equity of 13.57 percent was realized by Cisco Systems. Twelve trailing months earnings per share reached a value of $1.49. Last fiscal year, Cisco Systems paid $0.72 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.76, the P/S ratio is 2.72 and the P/B ratio is finally 2.26. The dividend yield amounts to 3.04 percent and the beta ratio has a value of 1.29.



Long-Term Stock Price Chart Of Cisco Systems (CSCO)
Long-Term Dividend Payment History of Cisco Systems (CSCO)
Long-Term Dividend Yield History of Cisco Systems (CSCO)


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CME Group (NASDAQ:CME) has a market capitalization of $25.69 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).


CME has a 2013 casflow from operations of $1.2 billion while CAPEX amounted to $190 million.


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 26.70, the P/S ratio is 8.75 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)

Microsoft (NASDAQ:MSFT) has a market capitalization of $378.29 billion. The company employs 128,000 people, generates revenue of $86,833.00 million and has a net income of $22,074.00 million. Microsoft’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $33,098.00 million. The EBITDA margin is 38.12 percent (the operating margin is 31.85 percent and the net profit margin 25.42 percent).


Cisco has a 2013 casflow from operations of $32.231 billion while CAPEX, excluded by acquistions and investments amounted to $5.485 billion.


Financial Analysis: The total debt represents 13.14 percent of Microsoft’s assets and the total debt in relation to the equity amounts to 25.22 percent. Due to the financial situation, a return on equity of 26.17 percent was realized by Microsoft. Twelve trailing months earnings per share reached a value of $2.63. Last fiscal year, Microsoft paid $1.12 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.45, the P/S ratio is 4.36 and the P/B ratio is finally 4.21. The dividend yield amounts to 2.44 percent and the beta ratio has a value of 0.97.



Long-Term Stock Price Chart Of Microsoft (MSFT)
Long-Term Dividend Payment History of Microsoft (MSFT)
Long-Term Dividend Yield History of Microsoft (MSFT)

If you would like to receive more dividend stock ideas, you should subscribe to my free e-mail list. Alternatively, you can follow me on Facebook or Twitter.

Apple (NASDAQ:AAPL) has a market capitalization of $592.62 billion. The company employs 80,300 people, generates revenue of $170,910.00 million and has a net income of $37,037.00 million. Apple’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $55,759.00 million. The EBITDA margin is 32.62 percent (the operating margin is 28.67 percent and the net profit margin 21.67 percent).


Cisco has a 2013 casflow from operations of $53.67 billion while CAPEX, excluded by acquistions and investments amounted to $8.17 billion.


Financial Analysis: The total debt represents 8.19 percent of Apple’s assets and the total debt in relation to the equity amounts to 13.73 percent. Due to the financial situation, a return on equity of 30.64 percent was realized by Apple. Twelve trailing months earnings per share reached a value of $6.19. Last fiscal year, Apple paid $1.63 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.98, the P/S ratio is 3.47 and the P/B ratio is finally 5.04. The dividend yield amounts to 1.90 percent and the beta ratio has a value of 0.88.



Long-Term Stock Price Chart Of Apple (AAPL)
Long-Term Dividend Payment History of Apple (AAPL)
Long-Term Dividend Yield History of Apple (AAPL)


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.

Check out Part II here: These 8 Dividend Stocks Bubbling Cash Like Lava Gold Mines (Part II)

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*I am long PM, CSCO, CME, MSFT. 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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