Our previous study showed that the average return of high dividend yielding stocks was 13.04% between 1927 and 2009. During that period, dividend stocks outperformed the market by an average of 1.36% per year. We are concerned about the Fed’s inflationary monetary policy and therefore recommend investors to play defensively by investing in high quality dividend stocks.
Here is a list of 11 large-cap companies with high dividend yields and low debt ratios. All stocks in our list have market capitalizations above $2 billion, Total Debt / Equity ratio of below 0.4, P/E ratio of below 15 and annualized dividend yields of at least 4%. The market data is obtained from Finviz.
Ticker | Company | P/E | Total Debt/Equity | Dividend Yield | YTD Return |
Terra Nitrogen Co | 13.21 | 0 | 7.43% | 52.55% | |
DNP Select Income Fund | 4.49 | 0.28 | 7.82% | 15.80% | |
Atlantic Power | 5.26 | 0.23 | 7.67% | 0.21% | |
ConocoPhillips | 8.1 | 0.33 | 4.10% | -2.94% | |
Mercury General | 11.59 | 0.14 | 6.02% | -2.95% | |
BP Prudhoe Bay Royalty Trust | 12.08 | 0 | 8.78% | -9.40% | |
Raytheon Co. | 7.55 | 0.35 | 4.25% | -9.48% | |
Cincinnati Financial | 14.92 | 0.17 | 5.96% | -11.21% | |
NYSE Euronext, Inc. | 11.22 | 0.31 | 4.91% | -16.04% | |
Rhino Resource Partners | 12.2 | 0.2 | 9.81% | -16.18% | |
Sims Metal Management | 13.38 | 0 | 4.08% | -41.92% |
Terra Nitrogen Company, L.P. (TNH): Terra Nitrogen Company produces nitrogen fertilizer products.TNH has a dividend yield of 7.43% and returned 52.55% since the beginning of this year. It has a market cap of $2.83B, a P/E ratio of 13.21 and total debt to equity ratio of 0. Jim Simons just invested $3.4 million in the stock (see billionaire Simons’ top stock picks).
DNP Select Income Fund Inc. (DNP): DNP Select Income Fund is a closed-end diversified management investment company. DNP has a dividend yield of 7.82% and returned 15.80% since the beginning of this year. It has a market cap of $2.40B, a P/E ratio of 4.49 and total debt to equity ratio of 0.28.
Atlantic Power Corporation (AT): Atlantic Power Corporation owns and operates a diverse fleet of power generation and infrastructure assets in the United States. AT has a dividend yield of 7.67% and returned 0.21% since the beginning of this year. It has a market cap of $4.82B, a P/E ratio of 5.26 and total debt to equity ratio of 0.23. Jim Simons is the main holder of AT.
ConocoPhillips (COP): ConocoPhillips is an international, integrated energy company. COP has a dividend yield of 4.10% and lost 2.94% since the beginning of this year. It has a market cap of $88.4B, a P/E ratio of 8.1 and total debt to equity ratio of 0.33. Warren Buffett held $2.8 billion in COP shares at the end of June (see Warren Buffett’s top stock picks). Jean-Marie Eveillard also had $438 million invested in COP shares.
Mercury General Corporation (MCY): Mercury General is primarily engaged in writing automobile insurance in a number of states, principally California. MCY has a dividend yield of 6.02% and lost 2.95% since the beginning of this year. It has a market cap of $2.19B, a P/E ratio of 11.59 and total debt to equity ratio of 0.14. Jean-Marie Eveillard had $16 million of MCY stocks.
BP Prudhoe Bay Royalty Trust (BPT): BP Prudhoe Bay Royalty Trust is a grantor trust formed for the purpose of owning and administering an overriding royalty interest. BPT has a dividend yield of 8.78% and lost 9.40% since the beginning of this year. It has a market cap of $2.31B, a P/E ratio of 12.08 and total debt to equity ratio of 0. Jim Simons had $20 million invested in BPT.
Raytheon Co. (RTN): Raytheon Company is a technology company. RTN has a dividend yield of 4.25% and lost 9.48% since the beginning of this year. It has a market cap of $14.3B, a P/E ratio of 7.55 and total debt to equity ratio of 0.35. Ric Dillon also invested nearly $100 million in RTN.
Cincinnati Financial Corp. (CINF): Cincinnati Financial Corporation is engaged in property casualty insurance. CINF has a dividend yield of 5.96% and lost 11.21% since the beginning of this year. It has a market cap of $4.41B, a P/E ratio of 14.92 and total debt to equity ratio of 0.17. Jean-Marie Eveillard had $336 million invested in CINF.
NYSE Euronext, Inc. (NYX): NYSE Euronext is a global operator of financial markets and provider of trading technologies. NYX has a dividend yield of 4.91% and lost 16.04% since the beginning of this year. It has a market cap of $6.41B, a P/E ratio of 11.22 and total debt to equity ratio of 0.31. John Paulson invested more than $100 million in NYX stocks (check out Paulson’s top stock picks).
Rhino Resource Partners LP (RNO): Rhino Resource Partners produces coal. RNO has a dividend yield of 9.81% and lost 16.18% since the beginning of this year. It has a market cap of $3.12B, a P/E ratio of 12.2 and total debt to equity ratio of 0.2. Charles Davidson invested over $200 million in RNO shares.
Disclosure: I am long COP.
