A company that pays consistent, rising dividends is likely a financially healthy firm that generates consistent cash flow (this cash, after all, is where the dividends come from).
These companies are often stable, and their stock prices tend to be less volatile than the market in general. As such, they may be lower risk than companies that do not pay dividends and that have more volatile price movements.
Because many dividend-paying stocks are lower risk, the stocks are an appealing investment for both younger people looking for a way to generate income over the long haul, and for people approaching retirement - or who are in retirement - who desire a source of retirement income.
Let's say you're looking for a few things: high-quality, solid dividend cash flow and a reasonable valuation. To meet those tests, you could think about something like this:
- Rated A++ in financial strength,
- 3%+ dividend yield and
- P/E ratio under 15.
Now to be sure this is limited, and it may not be exactly what you're after. Yet it does give you a starting point. When I use those metrics, I go from thousands of securities down to less than a dozen:
Here are the results...
AT&T -- Yield: 4.98%
AT&T (NYSE:T) employs 281,000 people, generates revenue of $146,801.00 million and has a net income of $13,687.00 million. The current market capitalization stands at $241.33 billion.AT&T’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $46,802.00 million. The EBITDA margin is 31.88% (the operating margin is 16.88% and the net profit margin 9.32%).
Financials: The total debt represents 31.33% of AT&T assets and the total debt in relation to the equity amounts to 102.84%. Due to the financial situation, a return on equity of 12.57% was realized by AT&T.
Twelve trailing months earnings per share reached a value of $2.26. Last fiscal year, AT&T paid $1.89 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 17.19, the P/S ratio is 1.61 and the P/B ratio is finally 1.93. The dividend yield amounts to 4.98%.
Stock Charts:
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| Long-Term Stock Price Chart of AT&T (T) |
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| Long-Term Dividend Payment History of AT&T (T) |
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| Long-Term Dividend Yield History of AT&T (T) |
Verizon Communication -- Yield: 4.27%
Verizon Communication (NYSE:VZ) employs 177,700 people, generates revenue of $131,620.00 million and has a net income of $18,375.00 million. The current market capitalization stands at $221.29 billion.Verizon Communication’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $46,567.00 million. The EBITDA margin is 35.38% (the operating margin is 25.12% and the net profit margin 13.96%).
Financials: The total debt represents 45.04% of Verizon Communication assets and the total debt in relation to the equity amounts to 670.77%. Due to the financial situation, a return on equity of 124.48% was realized by Verizon Communication.
Twelve trailing months earnings per share reached a value of $4.37. Last fiscal year, Verizon Communication paid $2.23 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.26, the P/S ratio is 1.64 and the P/B ratio is finally 13.12. The dividend yield amounts to 4.27%.
Stock Charts:
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| Long-Term Stock Price Chart of Verizon Communication (VZ) |
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| Long-Term Dividend Payment History of Verizon Communication (VZ) |
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| Long-Term Dividend Yield History of Verizon Communication (VZ) |
QUALCOMM -- Yield: 3.77%
QUALCOMM (NASDAQ:QCOM) employs 33,000 people, generates revenue of $25,281.00 million and has a net income of $5,268.00 million. The current market capitalization stands at $74.33 billion.QUALCOMM’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,350.00 million. The EBITDA margin is 29.07% (the operating margin is 22.12% and the net profit margin 20.84%).
Financials: The total debt represents 21.59% of QUALCOMM assets and the total debt in relation to the equity amounts to 34.91%. Due to the financial situation, a return on equity of 14.93% was realized by QUALCOMM.
Twelve trailing months earnings per share reached a value of $3.02. Last fiscal year, QUALCOMM 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 16.83, the P/S ratio is 3.02 and the P/B ratio is finally 2.47. The dividend yield amounts to 3.77%.
Stock Charts:
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| Long-Term Stock Price Chart of QUALCOMM (QCOM) |
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| Long-Term Dividend Payment History of QUALCOMM (QCOM) |
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| Long-Term Dividend Yield History of QUALCOMM (QCOM) |
Cisco Systems -- Yield: 3.74%
Cisco Systems (NASDAQ:CSCO) employs 71,833 people, generates revenue of $49,161.00 million and has a net income of $8,981.00 million. The current market capitalization stands at $139.11 billion.Cisco Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,696.00 million. The EBITDA margin is 27.86% (the operating margin is 21.91% and the net profit margin 18.27%).
Financials: The total debt represents 22.34% of Cisco Systems assets and the total debt in relation to the equity amounts to 42.47%. Due to the financial situation, a return on equity of 15.44% was realized by Cisco Systems.
Twelve trailing months earnings per share reached a value of $2.02. Last fiscal year, Cisco Systems paid $0.80 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.85, the P/S ratio is 2.85 and the P/B ratio is finally 2.37. The dividend yield amounts to 3.74%.
Stock Charts:
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| Long-Term Stock Price Chart of Cisco Systems (CSCO) |
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| Long-Term Dividend Payment History of Cisco Systems (CSCO) |
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| Long-Term Dividend Yield History of Cisco Systems (CSCO) |
Intl. Business Machines -- Yield: 3.58%
Intl. Business Machines (NYSE:IBM) employs 377,757 people, generates revenue of $81,741.00 million and has a net income of $13,364.00 million. The current market capitalization stands at $144.68 billion.Intl. Business Machines’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20,345.00 million. The EBITDA margin is 24.89% (the operating margin is 19.51% and the net profit margin 16.35%).
Financials: The total debt represents 36.10% of Intl. Business Machines assets and the total debt in relation to the equity amounts to 279.69%. Due to the financial situation, a return on equity of 102.29% was realized by Intl. Business Machines.
Twelve trailing months earnings per share reached a value of $13.62. Last fiscal year, Intl. Business Machines paid $5.00 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.87, the P/S ratio is 1.71 and the P/B ratio is finally 9.85. The dividend yield amounts to 3.58%.
Stock Charts:
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| Long-Term Stock Price Chart of Intl. Business Machines (IBM) |
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| Long-Term Dividend Payment History of Intl. Business Machines (IBM) |
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| Long-Term Dividend Yield History of Intl. Business Machines (IBM) |
Public Service Enterprise -- Yield: 3.55%
Public Service Enterprise (NYSE:PEG) employs 13,025 people, generates revenue of $10,415.00 million and has a net income of $1,679.00 million. The current market capitalization stands at $23.23 billion.Public Service Enterprise’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,176.00 million. The EBITDA margin is 40.10% (the operating margin is 27.93% and the net profit margin 16.12%).
Financials: The total debt represents 26.46% of Public Service Enterprise assets and the total debt in relation to the equity amounts to 76.01%. Due to the financial situation, a return on equity of 13.30% was realized by Public Service Enterprise.
Twelve trailing months earnings per share reached a value of $3.31. Last fiscal year, Public Service Enterprise paid $1.56 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.93, the P/S ratio is 2.25 and the P/B ratio is finally 1.79. The dividend yield amounts to 3.55%.
Stock Charts:
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| Long-Term Stock Price Chart of Public Service Enterprise (PEG) |
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| Long-Term Dividend Payment History of Public Service Enterprise (PEG) |
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| Long-Term Dividend Yield History of Public Service Enterprise (PEG) |
Merck -- Yield: 3.47%
Merck (NYSE:MRK) employs 68,000 people, generates revenue of $39,498.00 million and has a net income of $4,459.00 million. The current market capitalization stands at $147.26 billion.Merck’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20,379.00 million. The EBITDA margin is 51.60% (the operating margin is 13.97% and the net profit margin 11.29%).
Financials: The total debt represents 26.05% of Merck assets and the total debt in relation to the equity amounts to 59.35%. Due to the financial situation, a return on equity of 9.52% was realized by Merck.
Twelve trailing months earnings per share reached a value of $1.57. Last fiscal year, Merck paid $1.81 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 33.89, the P/S ratio is 3.73 and the P/B ratio is finally 3.30. The dividend yield amounts to 3.47%.
Stock Charts:
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| Long-Term Stock Price Chart of Merck (MRK) |
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| Long-Term Dividend Payment History of Merck (MRK) |
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| Long-Term Dividend Yield History of Merck (MRK) |
Intel Corporation -- Yield: 3.25%
Intel Corporation (NASDAQ:INTC) employs 107,300 people, generates revenue of $55,355.00 million and has a net income of $11,420.00 million. The current market capitalization stands at $148.55 billion.Intel Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $22,802.00 million. The EBITDA margin is 41.19% (the operating margin is 25.68% and the net profit margin 20.63%).
Financials: The total debt represents 22.00% of Intel Corporation assets and the total debt in relation to the equity amounts to 37.11%. Due to the financial situation, a return on equity of 19.53% was realized by Intel Corporation.
Twelve trailing months earnings per share reached a value of $2.34. Last fiscal year, Intel Corporation paid $0.96 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.65, the P/S ratio is 2.73 and the P/B ratio is finally 2.48. The dividend yield amounts to 3.25%.
Stock Charts:
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| Long-Term Stock Price Chart of Intel Corporation (INTC) |
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| Long-Term Dividend Payment History of Intel Corporation (INTC) |
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| Long-Term Dividend Yield History of Intel Corporation (INTC) |
Deere & Company -- Yield: 2.97%
Deere & Company (NYSE:DE) employs 57,200 people, generates revenue of $28,436.30 million and has a net income of $1,940.00 million. The current market capitalization stands at $25.11 billion.Deere & Company’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $4,760.60 million. The EBITDA margin is 16.74% (the operating margin is 11.88% and the net profit margin 6.82%).
Financials: The total debt represents 63.59% of Deere & Company assets and the total debt in relation to the equity amounts to 546.45%. Due to the financial situation, a return on equity of 24.54% was realized by Deere & Company.
Twelve trailing months earnings per share reached a value of $5.45. Last fiscal year, Deere & Company paid $2.40 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.73, the P/S ratio is 0.90 and the P/B ratio is finally 3.80. The dividend yield amounts to 2.97%.
Stock Charts:
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| Long-Term Stock Price Chart of Deere & Company (DE) |
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| Long-Term Dividend Payment History of Deere & Company (DE) |
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| Long-Term Dividend Yield History of Deere & Company (DE) |
Wal-Mart Stores Company -- Yield: 2.96%
Wal-Mart Stores Company (NYSE:WMT) employs 2,200,000 people, generates revenue of $482,130.00 million and has a net income of $15,080.00 million. The current market capitalization stands at $219.44 billion.Wal-Mart Stores Company’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $33,559.00 million. The EBITDA margin is 6.96% (the operating margin is 5.00% and the net profit margin 3.13%).
Financials: The total debt represents 25.07% of Wal-Mart Stores Company assets and the total debt in relation to the equity amounts to 62.12%. Due to the financial situation, a return on equity of 18.15% was realized by Wal-Mart Stores Company.
Twelve trailing months earnings per share reached a value of $4.56. Last fiscal year, Wal-Mart Stores Company paid $1.96 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.90, the P/S ratio is 0.45 and the P/B ratio is finally 2.69. The dividend yield amounts to 2.96%.
Stock Charts:
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| Long-Term Stock Price Chart of Wal-Mart Stores Company (WMT) |
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| Long-Term Dividend Payment History of Wal-Mart Stores Company (WMT) |
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| Long-Term Dividend Yield History of Wal-Mart Stores Company (WMT) |
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| 10 Best Stocks For Dividend Growth Investor Beginners (click to enlarge) |
