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Dividends are great but with all this market volatility, some look to be more stable than others. What do we mean by that, you ask? Simply stated, some firms may be offering juicy dividend yields that are potentially unsustainable relative to how much profits are being generated alone. Reviewing the payout ratio is one of the easiest ways to see if a dividend is potentially in trouble and or unsustainable. If the number is greater than 1, this means that the dividend payments cannot be completely covered by the firm’s current earnings, which could indicate dividend trouble.

We ran a screen for dividend stocks with a forward price-multiple ratio of less than 10. From this narrowed pool we then screened for companies with that held a manageable Payout Ratio of 50% or less.

The P/E Ratio ranks the list from highest to lowest.

1. Royal Bank of Canada (RY)

Sector

Financial Services

Industry

Banks - Regional - Canada

Market Cap

$71,335M

Beta

1.30

The company provides a variety of financial services to retail and corporate clients, which includes wealth management services, investment banking. and more. The firm's P/E ratio is 9.90. RY's payout ratio is 49.66%. The firm's dividend yield is 4.21%. The short interest is N/A as of 08/15/2011.

2. Eli Lilly and Company (LLY)

Sector

Healthcare

Industry

Drug Manufacturers - Major

Market Cap

$42,186 M

Beta

0.85

The company develops drugs and products to treat and precent human diseases. The firm’s P/E ratio is 9.86. LLY’s payout ratio is 46.03%. The firm’s dividend yield is 5.38%. The short interest is 2.60% as of 08/15/2011.

3. Canadian Imperial Bank of Communication (CM)

Sector

Financial Services

Industry

Banks - Regional - Canada

Market Cap

$30,812M

Beta

1.32

The company offers a variety of financial services and operates two strategic business lines, which include CIBC World Markets and CIBC Retail Markets. The firm’s P/E ratio is 9.64. CM’s payout ratio is 49.28%. The firm’s dividend yield is 4.51%. The short interest is N/A as of 08/15/2011.

4. Seaspan Corporation (SSW)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$918 M

Beta

1.14

The company operates containerships around the world. The firm’s P/E ratio is 8.83. The firm’s payout ratio is 44.70%. SSW’s dividend yield is 4.70%. The short interest is 3.20% as of 08/15/2011.

5. Harte-Hanks, Inc. (HHS)

Sector

Consumer Cycle

Industry

Marketing Services

Market Cap

$455M

Beta

1.53

The company offers direct and targeted marketing services to a variety of clients. The firm’s P/E ratio is 8.73. HHS’s payout ratio is 42.47%. The firm’s dividend yield is 4.28%. The short interest is 4.90% as of 08/15/2011.

6. Sun Life Financial Inc (SLF)

Sector

Financial Services

Industry

Insurance - Life

Market Cap

$15,074M

Beta

1.73

The company offers a variety of retirement and insurance products to both retail and corporate customers. The firm’s P/E ratio is 8.55. SLF’s payout ratio is 40.57%. The firm’s dividend yield is 5.60%. The short interest is N/A as of 08/15/2011.

7. Lockheed Martin Corporation (LMT)

Sector

Industrials

Industry

Aerospace & Defense

Market Cap

$23,953M

Beta

1.00

The Company develops and manufactures advanced technology systems along with a variety of aircraft for both the civil and defense space. The firm’s P/E ratio is 8.12. LMT’s payout ratio is 37.92. The firm’s dividend yield is 4.20%. The short interest is 7.40% as of 08/15/2011.

8. Olin Corporation (OLN)

Sector

Basic Materials

Industry

Specialty Chemicals

Market Cap

$1,498M

Beta

1.53

The company manufactures a variety of specialty chemicals. The firm’s P/E ratio is 7.98. OLN’s payout ratio is 30.71%. The firm’s dividend is 4.28%. The short interest is 8.10% as of 08/15/2011.

9. Manulife Financial Corporation (MFC)

Sector

Financial Services

Industry

Insurance - Life

Market Cap

$23,170M

Beta

2.25

The company offers insurance and wealth management services around the world.

The firm’s P/E ratio is 7.76. MFC’s payout ratio is 41.68%. The firm’s dividend yield is 4.07%. The short interest is N/A as of 08/15/2011.

We hope this list helps investors as they do their own due diligence on dividend paying stocks.

Source: 9 Cheap Stocks With Sustainable Dividends That Don't Ride Market Fears