Debt has big implications for the sustainability of a dividend. Because debt holders are always paid before a company’s dividend, excessive debt can threaten the existence of a dividend and lower value for shareholders.
We screened the largest cap dividend-paying stocks for those with low levels of debt (with debt to assets less than 20%). These stocks pay dividend yields above 2%.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.
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 companies pay reliable dividends? Use this list as a starting point for your own analysis.
List sorted by market cap.
1. Exxon Mobil Corporation (XOM): Market cap at $383.84B. Dividend yield at 2.26%. MRQ payout ratio of 20.54%. MRQ total debt to assets at 4.97%.
2. BHP Billiton Limited (BHP): Market cap at $220.18B. Dividend yield at 2.01%. MRQ payout ratio of 24.30%. Long-term debt of 16.24%.
3. Royal Dutch Shell plc (RDS.A): Market cap at $214.24B. Dividend yield at 4.95%. MRQ payout ratio of 29.91%. Long-term debt of 12.42%.
4. Microsoft Corporation (MSFT): Market cap at $212.51B. Dividend yield at 2.55%. MRQ payout ratio of 25.78%. Long-term debt of 11.95%.
5. BP plc (BP): Market cap at $132.49B. Dividend yield at 3.99%. MRQ payout ratio of 18.54%. Long-term debt of 16.44%.
6. ConocoPhillips (COP): Market cap at $101.46B. Dividend yield at 3.69%. MRQ payout ratio of 31.61%. Long-term debt of 14.54%.
7. CNOOC Limited (CEO): Market cap at $101.05B. Dividend yield at 2.02%. MRQ payout ratio of 33.15%. Long-term debt of 10.17%.
8. Mitsubishi UFJ Financial Group Inc (MTU): Market cap at $66.18B. Dividend yield at 3.21%. MRQ payout ratio of 14.63%. Long-term debt of 19.49%.
9. 3M Company (MMM): Market cap at $65.55B. Dividend yield at 2.39%. MRQ payout ratio of 34.60%. Long-term debt of 18.05%.
10. Freeport-McMoRan (FCX): Market cap at $46.12B. Dividend yield at 2.06%. MRQ payout ratio of 15.81%. Long-term debt of 15.33%.
*Data sourced from Screener.co.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
