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If you are considering dividend stocks as a source of income, company debt should be an important part of your analysis. Because debtholders are always paid before shareholder dividends, high levels of company debt can threaten the company’s dividend yield.

We ran a screen on dividend stocks for those with low debt, with most recent quarter total debt to assets below 0.2. We screened these companies for those seeing significant net institutional buying over the current quarter.

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.



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

List sorted by net institutional purchases as a percent of share float.

1. Quaker Chemical Corporation (NYSE:KWR): Specialty Chemicals Industry. Market cap of $423.57M. Develops, produces, and markets formulated chemical specialty products for various heavy industrial and manufacturing applications. Dividend yield at 2.85%, payout ratio at 31.89%. MRQ total debt/total assets at 0.07. Net institutional shares purchased over the current quarter at 1.6M, which is 13.11% of the company's 12.20M share float. This is a risky stock that is significantly more volatile than the overall market (beta = 2.56). The stock has had a couple of great days, gaining 9.69% over the last week, yet it has performed poorly over the last month, losing 18.22%.

2. Meredith Corp. (NYSE:MDP): Publishing Industry. Market cap of $913.11M. Engages in magazine publishing and related brand licensing, television broadcasting, integrated marketing, interactive media, and video production businesses in the United States. Dividend yield at 4.06%, payout ratio at 34.74%. MRQ total debt/total assets at 0.11. Net institutional shares purchased over the current quarter at 3.9M, which is 10.14% of the company's 38.46M share float. The stock is a short squeeze candidate, with a short float at 31.38% (equivalent to 11.83 days of average volume). The stock has had a couple of great days, gaining 5.79% over the last week.

3. Magna International, Inc. (NYSE:MGA): Auto Parts Industry. Market cap of $9.10B. Operates as an automotive supplier in North America, Europe, and internationally. Dividend yield at 2.67%, payout ratio at 20.57%. MRQ total debt/total assets at 0.01. Net institutional shares purchased over the current quarter at 9.0M, which is 4.04% of the company's 223.02M share float. The stock has had a couple of great days, gaining 8.36% over the last week. The stock has performed poorly over the last month, losing 21.66%.

*Dividend yield and total debt to assets data sourced from Screener.co, institutional data sourced from Fidelity, 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: 3 Low-Debt Dividend Stocks Being Bought Up By Smart Money