16 Cheap Dividend Stocks With Low Debt To Boost Share Repurchases

Dividend paying stocks with low debt ratios and big share repurchases originally published at long-term-investments.blogspot.com. I love dividend growth stocks and dividend paying companies in general but it’s also important to see that the corporate buys its own shares back.

The process of share repurchases is a special way to give shareholder’s money back in a very tax-optimized way. 

A low yielding stock with a 2 percent yield can lift the total yield via stock repurchases to 4 percent or so. For sure, share buybacks are no cash yields on your trading account; it’s an indirect way to reduce the current shares and lift the potential share price.

There is an index outside that covers some of the best stocks with share repurchases that bought at least 5 percent of its outstanding shares within the past 12 months.

Today I would like to screen the Buyback Achievers index by the best yielding stocks with a low forward P/E as well as a very low debt-to-equity ratio. Low debt is a good indicator for potential growth or additional share buybacks.

These are my criteria in detail:

- Positive Dividend Yield

- Forward P/E under 15

- Long-Term Debt-To-Equity below 0.2

- Member of the Buyback Achievers Index

In total, sixteen Buyback Achievers Index stocks fulfilled the above mentioned restrictions of which ten have a current buy or better rating.

15 Cheapest Share Buyback Achievers With Growth Potential

Stocks from the Share Buyback Achievers Index with cheap price ratios and growth potential originally published at "long-term-investments.blogspot.com". As you might know, I love growing dividends from a company but my dividend approach has a great fault: It doesn’t take great cash cows with no dividend payments into account.  

A dividend payment is only one way to distribute money back to shareholders. A second way is to buy own shares back. Some companies repurchase their shares instead of the dividend payment and they try to boost earnings per share growth with this model. It’s a very tax-optimized method, especially if you use debt for this process as happened with Apple.

I also look at the number of shares repurchases when I consider buying a stock. The total amount of cash distribution is critical and not the amount of dividend payments in the past. Some companies gave back money in the amount of their whole company over the recent five years and they try to follow this approach for the future. That’s what I really like.

Out there is a great index that covers some of the best dividend growth stocks with share repurchases and adds the best share buyback companies. Within the recent 12 months, all constituents needed to buy at least five percent of their own outstanding shares.

Today I like to screen the Share Buyback Achievers Index by the cheapest dividend stocks with additional growth potential. I selected stocks with a low forward P/E (under 15) as well as a P/B and P/S ratio of less than one. In addition, the five year earnings per share should grow at least with five percent or more.

Fifteen stocks fulfilled the above mentioned criteria. Half of the results pay a dividend between 1 percent and 2.5 percent. The rest is only focused on share buybacks. The good thing is that nine companies have a current buy or better rating.