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When companies carry less debt, they’re more likely to continue paying their dividends. This is because debtholders are always paid before dividends, so lower debt payments allow more flexibility to pay a dividend. The moral of the story: If you’re looking for dividend stocks, be sure to check the company’s debt levels.

We ran a screen on rallying dividend stocks – stocks paying dividend yields between 2-7% based on the latest quarter, while trading above their 20-day, 50-day, and 200-day moving averages. We also controlled for a sustainable payout ratio below 35%. Among these stocks, we then searched for those with most recent quarter total debt less than 20% of the company’s capital structure. The screen produced 6 stocks, listed below.


 We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.


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

List sorted by dividend yield.

1. Monsanto Co. (NYSE:MON):
Agricultural Chemicals Industry. Market cap of $36.86B. The stock is currently 2.55% above its 20-day moving average, 2.46% above its 50-day MA, and 7.59% above its 200-day MA. Dividend yield at 3.27%, payout ratio at 29.78%. MRQ total debt-to-assets at 10.88%. The stock has gained 36.88% over the last year.

2. Maiden Holdings, Ltd. (NASDAQ:MHLD):
Property & Casualty Insurance Industry. Market cap of $655.48M. The stock is currently 3.74% above its 20-day moving average, 13.37% above its 50-day MA, and 18.12% above its 200-day MA. Dividend yield at 3.09%, payout ratio at 26.09%. MRQ total debt-to-assets at 7.01%. The stock has had a good month, gaining 14.48%.

3. V.F. Corporation (NYSE:VFC): Textile Industry. Market cap of $10.04B. The stock is currently 5.75% above its 20-day moving average, 3.51% above its 50-day MA, and 16.66% above its 200-day MA. Dividend yield at 2.75%, payout ratio at 34.22%. MRQ total debt-to-assets at 14.61%. The stock has gained 21.48% over the last year.

4. Bob Evans Farms Inc. (NASDAQ:BOBE): Restaurants Industry. Market cap of $975.66M. The stock is currently 4.59% above its 20-day moving average, 3.85% above its 50-day MA, and 5.81% above its 200-day MA. Dividend yield at 2.49%, payout ratio at 32.93%. MRQ total debt-to-assets at 13.64%. The stock is a short squeeze candidate, with a short float at 6.68% (equivalent to 11.86 days of average volume). The stock has had a couple of great days, gaining 8.34% over the last week.

5. National Healthcare Corp. (NYSEMKT:NHC):
Long-Term Care Facilities Industry. Market cap of $651.81M. The stock is currently 0.37% above its 20-day moving average, 0.92% above its 50-day MA, and 9.81% above its 200-day MA. Dividend yield at 2.38%, payout ratio at 23.35%. MRQ total debt-to-assets at 1.19%. The stock has gained 42.9% over the last year.

6. Bancolombia S.A. (NYSE:CIB): Foreign Regional Banks Industry. Market cap of $13.20B. The stock is currently 1.92% above its 20-day moving average, 3.32% above its 50-day MA, and 7.38% above its 200-day MA. Dividend yield at 2.25%, payout ratio at 24.34%. MRQ total debt-to-assets at 19.39%. The stock has gained 38.39% over the last year.

*Dividend and debt data sourced from Screener.co, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Income Ideas: 6 Rallying Dividend Stocks With Low Debt