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.

Ex-Dividend Stocks: Best Dividend Paying Shares On September 06, 2013

The best yielding and biggest ex-dividend stocks researched by ”long-term-investments.blogspot.com”. Dividend Investors should have a quiet overview of stocks with upcoming ex dividend dates.

The ex dividend date is the final date on which the new stock buyer couldn’t receive the next dividend. If you like to receive the dividend, you need to buy the stock before the ex dividend date. I made a little screen of the best yielding stocks with a higher capitalization that have their ex date on the next trading day.

In total, 50 stocks go ex dividend - of which 16 yield more than 3 percent. The average yield amounts to 3.70%. Here is a full list of all stocks with ex-dividend date within the current week.

Here is the sheet of the best yielding, higher capitalized ex-dividend stocks:

Company	Ticker	Mcap	P/E	P/B	P/S	Yield
Linn Energy, LLC	LINE	5.63B	-	1.33	3.08	12.77%
Pepco Holdings, Inc.	POM	4.61B	-	1.09	1.03	5.83%
Reynolds American Inc.	RAI	26.08B	17.36	5.12	3.16	5.28%
PPL Corporation	PPL	18.12B	12.39	1.66	1.57	4.79%
SCANA Corp.	SCG	6.57B	13.79	1.46	1.46	4.32%
TELUS Corporation	TU	21.39B	17.54	3.01	2.01	3.93%
H&R Block, Inc.	HRB	7.55B	16.69	5.97	2.60	2.89%
Occidental Petroleum	OXY	72.26B	16.38	1.73	2.99	2.85%
Harris Corp.	HRS	6.28B	14.06	4.02	1.23	2.54%
The Travelers Companies, Inc.	TRV	30.47B	10.47	1.22	1.17	2.47%
CME Group Inc.	CME	24.48B	26.30	1.12	8.50	2.44%
Best Buy Co. Inc.	BBY	12.64B	-	3.51	0.30	1.83%
V.F. Corporation	VFC	20.99B	19.10	4.05	1.91	1.81%
WellPoint Inc.	WLP	26.17B	9.51	1.07	0.39	1.72%
Avnet Inc.	AVT	5.44B	12.32	1.27	0.21	1.51%
UMB Financial Corporation	UMBF	2.38B	21.29	1.94	7.01	1.44%
W.R. Berkley Corporation	WRB	5.58B	11.64	1.32	0.91	0.97%
CBS Corporation	CBS	33.25B	19.64	3.46	2.30	0.88%
CNO Financial Group, Inc.	CNO	3.16B	17.89	0.69	0.72	0.84%
Mentor Graphics Corp.	MENT	2.54B	23.65	2.44	2.35	0.80%

Insurer Aflac: The New Stock Holding For The Dividend Yield Passive Income Portfolio

Last Friday, I purchased the cheapest Dividend Champion with a forward P/E of 9.10. The company is acting within the accident and health insurance sector and is named AFLAC. Insurer AFLAC raised its dividends over a period of 30 consecutive years and yields at 2.36 percent. Earnings per share are expected to grow by 5.58 percent for the next year and 6.92 percent for the upcoming five years. That’s a solid value and if it comes true, a P/E below 10 is damn cheap in my view.

The stock suffers a little bit under recent damage claims as well as the low interest environment. I personally don’t have an idea how big the risks of a rising interest rate could be but I believe that they can be managed.

AFLAC is up 13.2 percent this year and gained 40 percent over the recent year. With a beta ratio of 1.89, AFLAC seems like a very risky and volatile stock but if you look at the fundamentals, you can see that it's not true. Also the debt to equity ratio of 0.28 is low. The company has around USD 4.2 billion in long-term debt at a net income of USD 2.8 billion

Earnings and Dividends From Aflac

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For readers who a new to the matter and my dividend growth philosophy: I funded a virtual portfolio with 100k on October 04, 2012 with the aim to build a passive income stream that doubles each five to ten years. I plan to purchase each week one stock holding until the money is fully invested. The total number of constituents is expected at 50 – 70 companies and the dividend income should be at least at $3,000 per year.

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The current AFL stake cost me around USD 1,200 bucks and will give me approximately USD 28 dividend income for the full year. The stock is underweighted with 0.75 percent portfolio share.

Latest Portfolio Transactions (Click to enlarge)

Dividend Yield Passive Income Portfolio I (Click to enlarge)

Dividend Yield Passive Income Portfolio II (Click to enlarge)

The full-year dividend yield income of the portfolio is now estimated at USD 2,090.33.  With USD 41.436,05 in cash on hands and bank accounts, it should be possible to hit my aim of a USD 3,000 dividend income by the end of the year. All I need to do is to buy stocks with a yield on cost for around 3 percent.

The current yield on cost amounts to 3.49 percent while the actual portfolio yield is a little bit lower at 3.21 percent due to the capital gains.

Portfolio Performance (Click to enlarge)

All stock holdings from the Dividend Yield Passive Income Portfolio are up in average by 9.28 percent since the date of funding. The underperformance to the main indices is reasonable to the slow purchasing process. In a down-going market, my strategy would perform better than the market. But I am not interested in quick money. I want to build a long-term dividend growth portfolio which doubles each ten years from alone.

Here is the income perspective:

Sym	Name	P/E Ratio	Dividend Yield		Buy	# Shrs	Income	Value
TRI	Thomson Reuters C	16.44	3.73		28.90	50	$64.50	$1,725.50
LMT	Lockheed Martin C	13.33	3.86		92.72	20	$89.00	$2,311.00
INTC	Intel Corporation	11.62	3.87		21.27	50	$45.00	$1,152.00
MCD	McDonald's Corpor	18.58	3		87.33	15	$45.15	$1,504.05
WU	Western Union Com	10.47	2.73		11.95	100	$47.50	$1,732.00
PM	Philip Morris Int	17.16	3.85		85.42	20	$68.78	$1,772.20
JNJ	Johnson & Johnson	24.49	2.76		69.19	20	$49.80	$1,844.60
MO	Altria Group Inc	17.12	4.76		33.48	40	$70.40	$1,486.00
SYY	Sysco Corporation	20.85	3.1		31.65	40	$44.40	$1,441.20
DRI	Darden Restaurant	15.97	4.09		46.66	30	$61.50	$1,484.70
CA	CA Inc.	14.37	3.36		21.86	50	$50.00	$1,482.50
PG	Procter & Gamble	17.99	2.9		68.72	25	$58.20	$2,034.25
KRFT	Kraft Foods Group	21.25	3.47		44.41	40	$80.00	$2,306.40
MAT	Mattel Inc.	18.96	3.07		36.45	40	$53.60	$1,695.20
PEP	Pepsico Inc. Com	22.24	2.51		70.88	20	$43.60	$1,728.20
KMB	Kimberly-Clark Co	21.52	3.13		86.82	15	$46.50	$1,492.35
COP	ConocoPhillips Co	10.6	4.09		61.06	20	$52.80	$1,320.00
GIS	General Mills In	18.37	2.67		42.13	30	$41.10	$1,550.40
UL	Unilever PLC Comm	21.06	3.06		39.65	35	$44.91	$1,473.50
NSRGY	NESTLE SA REG SHR	18.84	3.25		68.69	30	$65.31	$2,017.50
GE	General Electric	17.5	3.13		23.39	65	$48.10	$1,606.80
ADP	Automatic Data Pr	24.77	2.33		61.65	25	$42.50	$1,822.00
K	Kellogg Company C	26.18	2.64		61.52	25	$44.00	$1,683.00
KO	Coca-Cola Company	21.36	2.62		38.83	40	$42.80	$1,643.60
RTN	Raytheon Company	12.22	3.01		57.04	20	$42.00	$1,396.00
RCI	Rogers Communicat	11.83	4.1		51.06	50	$83.30	$2,030.00
GPC	Genuine Parts Com	19.88	2.51		77.06	20	$41.28	$1,648.00
TSCDY	TESCO PLC SPONS A	225.6	4.07		17.98	110	$75.68	$1,859.00
APD	Air Products and	17.35	2.79		85.71	15	$40.50	$1,454.85
GSK	GlaxoSmithKline P	19.17	4.47		52.16	30	$70.38	$1,564.50
WMT	Wal-Mart Stores	15.24	2.24		79.25	20	$34.72	$1,561.60
BTI	British American	16.92	3.86		114.6	23	$95.22	$2,448.35
CHL	China Mobile Limi	10.37	4.18		55.32	25	$54.95	$1,316.75
MMM	3M Company Common	18.21	2.12		110.27	15	$36.75	$1,742.85
TUP	Tupperware Brands	22.87	2.48		80.98	15	$29.40	$1,177.95
IBM	International Bus	13.65	1.77		206.35	8	$28.00	$1,548.32
HAS	Hasbro Inc.	18.43	3.18		44.09	30	$44.40	$1,361.40
T	AT&T Inc.	27.64	5.01		34.47	30	$53.70	$1,074.30
WAG	Walgreen Co. Comm	22.11	2.18		44.25	30	$33.00	$1,518.30
AFL	AFLAC Incorporate	9.37	2.33		59.39	20	$27.60	$1,187.80
							$2,090.33	$65,198.92
							Average Yield	3.21%
							Yield On Cost	3.49%