Seeking Alpha
Profile| Send Message|
( followers)

High dividend stocks are attracting a lot of interest as long-term interest rates are at historically low levels. Investors naturally go for the stocks with the highest current yields. The main question is whether or not a company will continue to pay those dividends. While nothing is guaranteed, there are a few factors that make dividend payouts more likely. A low payout ratio helps. It means that the company isn't spending out as much of its profits on dividends. A long-term debt to equity ratio under 0.5 can also be a strong suggestion that a company will be able to continue paying the dividends it sets. Looking at a company's current ratio is also a good idea. The "current ratio" describes a company's current assets relative to its liabilities.

With this line of reasoning in mind, using the stock screener at Finviz, we identified 7 high dividend stocks with earning power and strong balance sheets. Specifically, these stocks have dividends over 3%, a 50% or less payout ratio, a long-term debt to equity under 0.5, and a current ratio of at least 1.5, meaning their current assets are at least 50% more than their liabilities.

Sims Metal Management Limited (SMS) is a wholesale company with a $2.77B market cap. The company pays a 3.62% dividend and has a 37.43% payout ratio. SMS has a current ratio of 2.14 and a long-term debt-to-equity ratio of 0.10. It is currently priced at $13.42 a share.

Waddell & Reed Financial, Inc. (NYSE:WDR) is an asset management company with a $2.16B market cap. The company pays a 3.96% dividend and has a 37.87% payout ratio. WDR has a current ratio of 2.29 and a long-term debt-to-equity ratio of 0.36. It is currently priced at $25.27 a share.

Kronos Worldwide, Inc. (NYSE:KRO) is a specialty chemicals company with a $2.18B market cap. The company pays a 3.20% dividend and has a 44.81% payout ratio. KRO has a current ratio of 2.85 and a long-term debt-to-equity ratio of 0.45. It is currently priced at $18.77 a share.

Molex, Inc. (NASDAQ:MOLX) is a diversified electronics company with a $4.28B market cap. The company pays a 3.29% dividend and has a 43.24% payout ratio. MOLX has a current ratio of 2.24 and a long-term debt-to-equity ratio of 0.08. It is currently priced at $24.35 a share.

Maxim Integrated Products, Inc. (NASDAQ:MXIM) is a broad line semiconductor company with a $7.68B market cap. The company pays a 3.34% dividend and has a 49.63% payout ratio. MXIM has a current ratio of 3.89 and a long-term debt-to-equity ratio of 0.12. It is currently priced at $26.33 a share.

Intel Corporation (NASDAQ:INTC) is a major diversified electronics company with a $124.96B market cap. The company pays a 3.42% dividend and has a 30.30% payout ratio. INTC has a current ratio of 2.24 and a long-term debt-to-equity ratio of 0.15. It is currently priced at $24.54 a share. Paul Ruddock and Steve Heinz's Lansdowne Partners had $491.52 million at the end of the third quarter, while Ken Fisher's Fisher Asset Management had roughly $414.02 million in the company at the end of September.

Eli Lilly & Co. (NYSE:LLY) is a major drug manufacturing company with a $48.39B market cap. The company pays a 4.69% dividend and has a 48.65% payout ratio. LLY has a current ratio of 1.77 and a long-term debt-to-equity ratio of 0.36. It is currently priced at $41.80 a share. Jim Simons' Renaissance Technologies had $262.47 million in LLY at the end of the third quarter.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 7 Dividend Stocks With Earning Power And Strong Balance Sheets