Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message| ()  

In the search for attractive dividend stocks, keep in mind the need for company liquidity. Cash-strapped firms are least able to fund a consistent dividend, so look at a company's cash holdings to help determine whether they pay a sustainable dividend.

We ran a screen on dividend stocks with low company debt (with total debt/equity below 0.3) for those with high cash relative to their average quarterly operating expenses over the current quarter.

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

List sorted by dividend yield.

1. Microsoft Corporation (MSFT): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap of $233.19B. Dividend yield at 2.89%, payout ratio at 24.37%. Total debt/equity at 0.20. Average quarterly operating expense over the last five quarters at $10,590.2M, vs. most recent cash and short term investments at $57,403M, implies a Cash / Avg. Operating Expense ratio at 5.42. The stock has gained 1.24% over the last year.

2. KLA-Tencor Corporation (KLAC): Engages in the design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. Market cap of $8.22B. Dividend yield at 2.84%, payout ratio at 22.12%. Total debt/equity at 0.25. Average quarterly operating expense over the last five quarters at $511.41M, vs. most recent cash and short term investments at $2,100.15M, implies a Cash / Avg. Operating Expense ratio at 4.11. The stock has had a couple of great days, gaining 5.14% over the last week.

3. Analog Devices Inc. (ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap of $11.0B. Dividend yield at 2.71%, payout ratio at 32.66%. Total debt/equity at 0.23. Average quarterly operating expense over the last five quarters at $481.11M, vs. most recent cash and short term investments at $3,592.46M, implies a Cash / Avg. Operating Expense ratio at 7.47. The stock has lost 0.3% over the last year.

4. Corning Inc. (GLW): Manufactures and processes specialty glass and ceramics products worldwide. Market cap of $22.51B. Dividend yield at 2.09%, payout ratio at 9.33%. Total debt/equity at 0.11. Average quarterly operating expense over the last five quarters at $1,392.4M, vs. most recent cash and short term investments at $6,421M, implies a Cash / Avg. Operating Expense ratio at 4.61. The stock has had a couple of great days, gaining 8.73% over the last week.

5. The Charles Schwab Corporation (SCHW): Provides securities brokerage, banking, and related financial services to individuals and institutional clients. Market cap of $15.82B. Dividend yield at 1.93%, payout ratio at 35.49%. Total debt/equity at 0.26. Average quarterly operating expense over the last five quarters at $840M, vs. most recent cash and short term investments at $6,376M, implies a Cash / Avg. Operating Expense ratio at 7.59. The stock has had a couple of great days, gaining 6.22% over the last week.

6. Keynote Systems Inc. (KEYN): Provides Internet and mobile cloud monitoring solutions worldwide. Market cap of $353.27M. Dividend yield at 1.18%, payout ratio at 7.66%. Total debt/equity at 0.0. Average quarterly operating expense over the last five quarters at $21.47M, vs. most recent cash and short term investments at $101.55M, implies a Cash / Avg. Operating Expense ratio at 4.73. The stock has gained 35.41% over the last year.

7. MarketAxess Holdings Inc. (MKTX): Operates an electronic trading platform that enables investment industry professionals to trade corporate bonds and other types of fixed-income instruments. Market cap of $1.17B. Dividend yield at 1.17%, payout ratio at 31.48%. Total debt/equity at 0.0. Average quarterly operating expense over the last five quarters at $24.83M, vs. most recent cash and short term investments at $157.62M, implies a Cash / Avg. Operating Expense ratio at 6.35. The stock has gained 51.06% over the last year.

8. Franklin Resources Inc. (BEN): Provides its services to individuals, institutions, pension plans, trusts, and partnerships. Market cap of $21.02B. Dividend yield at 1.12%, payout ratio at 11.53%. Total debt/equity at 0.25. Average quarterly operating expense over the last five quarters at $1,099.92M, vs. most recent cash and short term investments at $6701.75M, implies a Cash / Avg. Operating Expense ratio at 6.09. The stock has lost 13.95% over the last year.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 8 Low Debt Dividend Stocks With High Cash Relative To Expenses