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Do you prefer stocks that offer both dividend income and the real possibility of capital gains? You might be interested in our list below:

We began by screening for low-debt dividend stocks: those paying dividend yields above 1%, with sustainable payout ratios below 50%, and debt-to-equity ratios below 0.1.

Profitability is a very important consideration when choosing among dividend stocks. If you want to be able to rely on a company's dividend, be sure that the company's profits are also reliable. With this in mind we then analyzed sources of profitability using the DuPont formula.

The DuPont formula uses return on equity (ROE) for its profitability measurement. The higher the ROE the more profitable the company appears, but this profitability can come from many sources - some better than others.

In general, an encouraging DuPont breakdown implies one or more of the following:

-Improving Net Profit Margin, i.e. higher Net Income/ Revenues
-Improving Asset Efficiency, i.e. higher Sales/Assets
-Decreasing Financial Leverage ratio, i.e. lower Assets/Equity

Companies passing all requirements are thus experiencing increasing profits due to operations and not to increased use of leverage.

For an interactive version of this chart, click on the image below. Tool provided by Kapitall, analyst ratings sourced from Zacks Investment Research. (click to enlarge)

As a recap, these names have:

- Low debt: Total Debt / Equity ratio <.1

- Dividend yields between 1% and 7%, and sustainable payout ratios below 50%.

- Encouraging DuPont Breakdowns

- Market caps above $300 million

Do you think these stocks pay reliable dividends? Use this list as a starting-off point for your own analysis.

1. Chico's FAS Inc. (NYSE:CHS): Operates as a specialty retailer of casual-to-dressy clothing, intimates, complementary accessories, and other non-clothing gift items. Market cap at $3.B, most recent closing price at $18.04. MRQ net profit margin at 6.54% vs. 4.92% y/y. MRQ sales/assets at 0.391 vs. 0.368 y/y. MRQ assets/equity at 1.441 vs. 1.447 y/y.

Dividend yield at 1.17%. Payout ratio at 20.28%. Debt/Equity at 0.

2. FactSet Research Systems Inc. (NYSE:FDS): Provides financial and economic information to investment community worldwide. Market cap at $4.07B, most recent closing price at $91.94. MRQ net profit margin at 23.37% vs. 21.3% y/y. MRQ sales/assets at 0.299 vs. 0.292 y/y. MRQ assets/equity at 1.257 vs. 1.276 y/y.

Dividend yield at 1.33%. Payout ratio at 27.48%. Debt/Equity at 0.

3. Finish Line Inc. (NASDAQ:FINL): Operates as a mall-based specialty retailer in the United States. Market cap at $1.04B, most recent closing price at $20.54. MRQ net profit margin at 6.49% vs. 6.31% y/y. MRQ sales/assets at 0.534 vs. 0.483 y/y. MRQ assets/equity at 1.349 vs. 1.415 y/y.

Dividend yield at 1.2%. Payout ratio at 13.9%. Debt/Equity at 0.

4. Foot Locker, Inc. (NYSE:FL): Operates as a retailer of athletic footwear and apparel. Market cap at $5.38B, most recent closing price at $35.60. MRQ net profit margin at 6.96% vs. 4.73% y/y. MRQ sales/assets at 0.462 vs. 0.458 y/y. MRQ assets/equity at 1.441 vs. 1.455 y/y.

Dividend yield at 2.06%. Payout ratio at 28.51%. Debt/Equity at 0.06.

5. J&J Snack Foods Corp. (NASDAQ:JJSF): Together with its subsidiaries, manufactures nutritional snack foods, as well as distributes frozen beverages to the food service and retail supermarket industries in the United States, Mexico, and Canada. Market cap at $1.2B, most recent closing price at $63.89. MRQ net profit margin at 8.07% vs. 7.28% y/y. MRQ sales/assets at 0.402 vs. 0.398 y/y. MRQ assets/equity at 1.268 vs. 1.274 y/y.

Dividend yield at 1%. Payout ratio at 18%. Debt/Equity at 0.

6. National Interstate Corporation (NASDAQ:NATL): Operates as a specialty property and casualty insurance company in the United States, the District of Columbia, and the Cayman Islands. Market cap at $510.97M, most recent closing price at $26.15. MRQ net profit margin at 7.19% vs. 4.99% y/y. MRQ sales/assets at 0.079 vs. 0.075 y/y. MRQ assets/equity at 4.137 vs. 4.606 y/y.

Dividend yield at 1.53%. Payout ratio at 19.96%. Debt/Equity at 0.06.

7. Presidential Life Corp. (NASDAQ:PLFE): Through its subsidiary, Presidential Life Insurance Company engages in the marketing and sale of various fixed annuity, life insurance, and accident and health insurance products in the United States. Market cap at $415.15M, most recent closing price at $14.03. MRQ net profit margin at 8.32% vs. 5.31% y/y. MRQ sales/assets at 0.015 vs. 0.014 y/y. MRQ assets/equity at 4.669 vs. 5.025 y/y.

Dividend yield at 1.79%. Payout ratio at 27.52%. Debt/Equity at 0.

8. ProAssurance Corporation (NYSE:PRA): Provides professional liability insurance products primarily to physicians, dentists, other healthcare providers, and healthcare facilities in the United States. Market cap at $2.78B, most recent closing price at $90.30. MRQ net profit margin at 34.16% vs. 26.98% y/y. MRQ sales/assets at 0.035 vs. 0.032 y/y. MRQ assets/equity at 2.117 vs. 2.468 y/y.

Dividend yield at 1.11%. Payout ratio at 9.76%. Debt/Equity at 0.

9. QUALCOMM Incorporated (NASDAQ:QCOM): Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. Market cap at $108.15B, most recent closing price at $63.47. MRQ net profit margin at 26.09% vs. 25.65% y/y. MRQ sales/assets at 0.113 vs. 0.113 y/y. MRQ assets/equity at 1.283 vs. 1.351 y/y.

Dividend yield at 1.57%. Payout ratio at 30.23%. Debt/Equity at 0.

Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 9 Low Debt Dividend Stocks With Encouraging Dupont Breakdowns