A real problem that affects the stock price is
the debt situation. While everybody is only talking about growth and future
potential, I do look at these ratios and the possibilities to repay the debt.
Remember, you are a shareholder and get your dividends after loan and interest repayments.
Debt overloaded stocks have the problems that
they need decades to reduce this debt if they are working in a non growing
industry. A stock with a bigger cash amount on banks is in my view a better alternative. The company
has more possibilities to grow and if they don’t find a solution for investing the money,
the can repurchase own shares or boost the current dividend.
Today, I want to discover some of the best
dividend growth stocks with a very long dividend growth history and a very low leverage risk. I selected 109 Dividend Champions and screened them by a debt to equity ratio of
less than 0.1. Thirteen stocks remained of which seven have a buy or better
ratio.
Here are my favorite stocks:
Financial Analysis: The total debt represents 5.23 percent of the company’s assets and the total debt in relation to the equity amounts to 8.93 percent. Due to the financial situation, a return on equity of 20.30 percent was realized. Twelve trailing months earnings per share reached a value of $13.32. Last fiscal year, the company paid $3.51 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.86, the P/S ratio is 0.95 and the P/B ratio is finally 1.68. The dividend yield amounts to 3.05 percent and the beta ratio has a value of 0.77.
Automatic Data Processing (NASDAQ:ADP) has a market capitalization of $31.42 billion. The company employs 57,000 people, generates revenue of $10.665 billion and has a net income of $1.388 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.343 billion. The EBITDA margin is 21.97 percent (the operating margin is 19.90 percent and the net profit margin 13.02 percent).
Financial Analysis: The total debt represents 0.05 percent of the company’s assets and the total debt in relation to the equity amounts to 0.27 percent. Due to the financial situation, a return on equity of 22.90 percent was realized. Twelve trailing months earnings per share reached a value of $2.79. Last fiscal year, the company paid $1.55 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 23.23, the P/S ratio is 2.94 and the P/B ratio is finally 5.13. The dividend yield amounts to 2.69 percent and the beta ratio has a value of 0.67.
Hormel Foods (NYSE:HRL) has a market capitalization of $10.71 billion. The company employs 19,700 people, generates revenue of $8.230 billion and has a net income of $504.96 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $845.48 million. The EBITDA margin is 10.27 percent (the operating margin is 9.29 percent and the net profit margin 6.14 percent).
Financial Analysis: The total debt represents 5.48 percent of the company’s assets and the total debt in relation to the equity amounts to 8.87 percent. Due to the financial situation, a return on equity of 18.26 percent was realized. Twelve trailing months earnings per share reached a value of $1.87. Last fiscal year, the company 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 21.68, the P/S ratio is 1.30 and the P/B ratio is finally 3.77. The dividend yield amounts to 1.68 percent and the beta ratio has a value of 0.52.
Take a closer look at the full list of Dividend Champions with low debt. The average P/E ratio amounts to 21.39 and forward P/E ratio is 17.46. The dividend yield has a value of 2.41 percent. Price to book ratio is 3.09 and price to sales ratio 2.30. The operating margin amounts to 16.94 percent and the beta ratio is 0.82. Stocks from the list have an average debt to equity ratio of 0.04.
Here is the full table with some fundamentals (TTM):
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| Dividend Champions With Low Debt To Equity Ratios (Click to enlarge) |
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Related stock
ticker symbols:
MCY, BWL-A, CVX,
ADP, XOM, TROW, LANC, HRL, GRC, RAVN, TR, CLC, HP
Selected Articles:
*I am long ADP. 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.