GameStop Corp. (GME), The Cheesecake Factory Incorporated (CAKE): Dividend Payers With No Debt

The big problem for NutriSystem is that its diet products are expensive and discretionary. Effectively, customers pay the company to cook for them. While that may be a justifiable expense in good times, when money is tight the company’s falling top line suggests it’s one of the first things to go. A difficult period, however, doesn’t mean the company’s business won’t survive and prosper in the future. In fact, NutriSystem has been around for over 40 years, so it has seen its share of hard times.

This country’s increasing tendency toward unhealthy lifestyles (notably including eating habits) suggests that there is a clear market for NutriSystem’s offering. As baby boomers crest into retirement, such meal replacement plans could see a strong boost as medical practitioners push patients to shed pounds and stay out of hospitals.

The shares recently had an 8% dividend yield. That may not be sustainable if results don’t improve soon. So an investment here is only appropriate for more aggressive income investors seeking a play on America’s expanding waist line.

GameStop Corp. (NYSE:GME)

GameStop Corp. (NYSE:GME) is the world leader in video game stores, with more than 6,500 stores in 15 countries. In early 2012 the company initiated a dividend. It increased the disbursement 10% earlier this year. With no long-term debt and a leading industry position, this would seem like a great company to own.

That said, GameStop Corp. (NYSE:GME) faces some notable challenges. For example, it depends heavily on the purchase and sale of used games. While a stable business today, game and console makers are both looking to deliver games over the Internet. This could materially hamper the used game market. However, it could also put GameStop Corp. (NYSE:GME)’s new game sales into a tailspin. And this trend can’t be stopped.

GameStop is taking action, working to broaden its own digital platforms. So it has the potential to survive this threat. However it is likely to be a vastly different company than it is today if it does survive. All but the most aggressive investors should stay on the sidelines.

No Debt Dividends

It’s interesting to see how many companies pay dividends and have no debt. It is a great starting point for building a bulletproof portfolio. Conservative investors should take a look at The CheeseCake Factory Incorporated (NASDAQ:CAKE), while more aggressive types might consider NutriSystem.

The article Dividend Payers With No Debt originally appeared on Fool.com and is written by Reuben Gregg Brewer.

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