Great dividend paying stocks with low debt ratios originally published at long-term-investments.blogspot.com. Dividend growth is wonderful but it does not mean a good return in the end. Out there are also stocks that hiked dividends over 10 years or more but they delivered only a 3 percent annual return of which 2 percent are explainable to cash dividend payments.
A good dividend growth stocks is a pick that delivers adequate returns far above the expected inflation rate. Nobody knows which stock can give you this but one critical factor is the amount of debt. A low leveraged stock has more possibilities to grow in an easy way.
Today I would like to share some great dividend stocks with low debt ratios. Great dividend stocks are those stocks that have delivered good growth and high returns combined in the past.
I used a restriction of a debt to equity ratio of 0.5 percent. Eleven stocks fulfilled my criteria of which six are recommended to buy.
Here are my favorite stocks:
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Cincinnati Financial Corporation (NASDAQ:CINF) has a market capitalization of $7.58 billion. The company employs 4,057 people, generates revenue of $4.111 billion and has a net income of $421.00 million. Cincinnati Financial’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $657.00 million. The EBITDA margin is 15.98 percent (the operating margin is 13.77 percent and the net profit margin 10.24 percent).
Financial Analysis: The total debt represents 5.63 percent of Cincinnati Financial’s assets and the total debt in relation to the equity amounts to 17.07 percent. Due to the financial situation, a return on equity of 8.03 percent was realized by Cincinnati Financial. Twelve trailing months earnings per share reached a value of $3.45. Last fiscal year, Cincinnati Financial paid $1.62 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.44, the P/S ratio is 1.85 and the P/B ratio is finally 1.39. The dividend yield amounts to 3.61 percent and the beta ratio has a value of 0.70.
| Long-Term Stock Price Chart Of Cincinnati Financial (CINF) |
| Long-Term Dividend Payment History of Cincinnati Financial (CINF) |
| Long-Term Dividend Yield History of Cincinnati Financial (CINF) |
Chevron Corporation (NYSE:CVX) has a market capitalization of $239.36 billion. The company employs 62,000 people, generates revenue of $241.909 billion and has a net income of $26.336 billion. Chevron’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $59.975 billion. The EBITDA margin is 24.79 percent (the operating margin is 19.15 percent and the net profit margin 10.89 percent).
Financial Analysis: The total debt represents 5.23 percent of Chevron’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 by Chevron. Twelve trailing months earnings per share reached a value of $12.34. Last fiscal year, Chevron 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 10.04, the P/S ratio is 0.99 and the P/B ratio is finally 1.77. The dividend yield amounts to 3.23 percent and the beta ratio has a value of 0.82.
| Long-Term Stock Price Chart Of Chevron (CVX) |
| Long-Term Dividend Payment History of Chevron (CVX) |
| Long-Term Dividend Yield History of Chevron (CVX) |
Erie Indemnity Company (NASDAQ:ERIE) has a market capitalization of $3.45 billion. The company employs 4,400 people, generates revenue of $5.512 billion and has a net income of $619.00 million. Erie Indemnity’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.049 billion. The EBITDA margin is 37.17 percent (the operating margin is 16.31 percent and the net profit margin 11.23 percent).
Financial Analysis: The total debt represents 0.00 percent of Erie Indemnity’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 22.49 percent was realized by Erie Indemnity. Twelve trailing months earnings per share reached a value of $3.05. Last fiscal year, Erie Indemnity paid $4.25 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.21, the P/S ratio is 0.63 and the P/B ratio is finally 5.42. The dividend yield amounts to 3.19 percent and the beta ratio has a value of 0.63.
| Long-Term Stock Price Chart Of Erie Indemnity (ERIE) |
| Long-Term Dividend Payment History of Erie Indemnity (ERIE) |
| Long-Term Dividend Yield History of Erie Indemnity (ERIE) |
Johnson & Johnson (NYSE:JNJ) has a market capitalization of $250.84 billion. The company employs 127,600 people, generates revenue of $67.224 billion and has a net income of $10.514 billion. Johnson & Johnson’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20.811 billion. The EBITDA margin is 30.96 percent (the operating margin is 20.49 percent and the net profit margin 15.64 percent).
Financial Analysis: The total debt represents 13.32 percent of Johnson & Johnson’s assets and the total debt in relation to the equity amounts to 24.94 percent. Due to the financial situation, a return on equity of 17.81 percent was realized by Johnson & Johnson. Twelve trailing months earnings per share reached a value of $4.50. Last fiscal year, Johnson & Johnson 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 19.78, the P/S ratio is 3.74 and the P/B ratio is finally 3.75. The dividend yield amounts to 2.96 percent and the beta ratio has a value of 0.62.
| Long-Term Stock Price Chart Of Johnson & Johnson (JNJ) |
| Long-Term Dividend Payment History of Johnson & Johnson (JNJ) |
| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
Take a closer look at the full list of great dividend growth stocks with low debt ratios. The average P/E ratio amounts to 18.52 and forward P/E ratio is 16.73. The dividend yield has a value of 2.39 percent. Price to book ratio is 3.35 and price to sales ratio 2.34. The operating margin amounts to 24.81 percent and the beta ratio is 0.69. Stocks from the list have an average debt to equity ratio of 0.11.
Here is the full table with some fundamentals (TTM):
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| 11 Low Debt Dividend Growth Stocks With Good Returns (Click to enlarge) |
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