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It’s important to remember that stocks represent ownership interests in companies run by real management teams. How well a company is run has big implications to its profitability and its ability to maintain a dividend yield.

One way to evaluate this is by looking at the corporate governance policies of the company, such as its board composition and shareholder rights.

Institutional Shareholder Services (ISS) gives ratings for four areas of corporate governance, on risks related to: the board, the audit committee, the compensation committee, and shareholder rights.

We ran a screen on dividend stocks with high liquidity, with current ratios greater than 3. We screened these stocks for those with ‘low risk’ ratings from ISS in all four corporate governance areas.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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 stocks pay sustainable dividends? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. Texas Instruments Inc. (NASDAQ:TXN): Engages in the design and sale of semiconductors to electronics designers and manufacturers worldwide. Market cap of $35.69B. Dividend yield at 2.20%, payout ratio at 19.21%. Current ratio at 6.20. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a good month, gaining 11.52%.

2. Stryker Corp. (NYSE:SYK): Operates as a medical technology company worldwide. Market cap of $19.05B. Dividend yield at 1.47%, payout ratio at 21.58%. Current ratio at 4.06. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 0.75% over the last year.

3. NewMarket Corp. (NYSE:NEU): Engages in the petroleum additives and real estate development businesses. Market cap of $2.30B. Dividend yield at 1.44%, payout ratio at 13.19%. Current ratio at 3.0. According to ISS, the company has "low concern" in all corporate governance categories. The stock is a short squeeze candidate, with a short float at 11.31% (equivalent to 11.74 days of average volume). The stock has gained 43.11% over the last year.

4. Cisco Systems, Inc. (NASDAQ:CSCO): Designs, manufactures, and sells Internet protocol (NYSE:IP)-based networking and other products related to the communications and information technology industry worldwide. Market cap of $94.25B. Dividend yield at 1.37%, payout ratio at 10.14%. Current ratio at 3.27. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 22.9% over the last year.

5. ADTRAN Inc. (NASDAQ:ADTN): Designs, manufactures, markets, and services network access solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Market cap of $2.06B. Dividend yield at 1.13%, payout ratio at 16.12%. Current ratio at 4.77. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 6.18% over the last week.

6. Alamo Group Inc. (NYSE:ALG): Provides equipment and related replacement parts for maintenance and agriculture. Market cap of $255.11M. Dividend yield at 1.12%, payout ratio at 10.62%. Current ratio at 3.69. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 11.16% over the last year.

*ISS ratings sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: 6 Highly Liquid Dividend Stocks With Strong Corporate Governance