6 Large-Cap Dividend Stocks With Low Debt and Impressive Profitability

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 |  Includes: ACE, FITB, HON, INTC, MMM, UTX
by: Kapitall

Company debt is a very important consideration when choosing among dividend stocks. Because debt holders are always paid before shareholder dividends, company debt is a wedge between firm value and the firm’s value to shareholders. High amounts of company debt also decrease the firm’s financial flexibility.

We ran a screen on large-cap dividend stocks (paying dividend yields above 2% and sustainable payout ratios below 35%) with low company debt. We screened this universe for companies with higher gross, operating and pretax margins than their industry peers.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.

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Do you think these companies pay sustainable dividends? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. Intel Corporation (NASDAQ:INTC):
Semiconductor Industry. Market cap of $110.23B. Dividend yield at 3.50%, payout ratio at 32.52%. MRQ total debt to assets at 0.03. TTM gross margin at 74.42% vs. industry gross margin at 60.57%. TTM operating margin at 34.39% vs. industry operating margin at 26.61%. TTM pretax margin at 34.43% vs. industry pretax margin at 26.43%. It has been a rough couple of days for the stock, losing 5.97% over the last week.

2. Honeywell International Inc. (NYSE:HON): Aerospace/Defense Products and Services Industry. Market cap of $37.54B. Dividend yield at 2.78%, payout ratio at 32.68%. MRQ total debt to assets at 0.19. TTM gross margin at 28.99% vs. industry gross margin at 26.37%. TTM operating margin at 12.34% vs. industry operating margin at 12.01%. TTM pretax margin at 10.06% vs. industry pretax margin at 7.79%. It has been a rough couple of days for the stock, losing 9.64% over the last week.

3. 3M Co. (NYSE:MMM): Conglomerates Industry. Market cap of $58.71B. Dividend yield at 2.67%, payout ratio at 33.64%. MRQ total debt to assets at 0.17. TTM gross margin at 51.60% vs. industry gross margin at 42.11%. TTM operating margin at 21.38% vs. industry operating margin at 13.72%. TTM pretax margin at 20.85% vs. industry pretax margin at 13.03%. It has been a rough couple of days for the stock, losing 5.04% over the last week.

4. United Technologies Corp. (NYSE:UTX): Conglomerates Industry. Market cap of $67.37B. Dividend yield at 2.60%, payout ratio at 31.34%. MRQ total debt to assets at 0.18. TTM gross margin at 30.46% vs. industry gross margin at 26.37%. TTM operating margin at 13.89% vs. industry operating margin at 12.01%. TTM pretax margin at 12.58% vs. industry pretax margin at 7.79%. It has been a rough couple of days for the stock, losing 10.5% over the last week.

5. Fifth Third Bancorp (NASDAQ:FITB): Regional Banks Industry. Market cap of $10.34B. Dividend yield at 2.14%, payout ratio at 16.77%. MRQ total debt to assets at 0.12. TTM gross margin at 75.80% vs. industry gross margin at 70.96%. TTM operating margin at 43.79% vs. industry operating margin at 38.97%. TTM pretax margin at 23.22% vs. industry pretax margin at 21.97%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.2). It has been a rough couple of days for the stock, losing 10.99% over the last week.

6. ACE Limited (NYSE:ACE): Property and Casualty Insurance Industry. Market cap of $21.32B. Dividend yield at 2.10%, payout ratio at 19.60%. MRQ total debt to assets at 0.05. TTM gross margin at 19.96% vs. industry gross margin at 15.81%. TTM operating margin at 19.96% vs. industry operating margin at 12.76%. TTM pretax margin at 18.71% vs. industry pretax margin at 11.18%. It has been a rough couple of days for the stock, losing 5.67% over the last week.

*Profitability data sourced from Fidelity, dividend and total debt to assets 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.