5 High Yield Stocks From The S&P 500 With Lowest Debt To Equity Ratio

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Includes: AEE, FII, RAI, T, TEG
by: Dividend Screen

Many investors own stocks from the Dow Jones and the S&P 500. Both indices include 500 leading companies in leading industries of the U.S. economy, capturing 75 percent coverage of U.S. equities. 19 companies from the S&P 500 have yields above 5 percent (high yield). At the first view, they give you an attractive income if the payments are sustained. Some major criteria for persistent dividends are the business cyclic, the payout ratio and the debt situation. Remember, a highly leveraged company with big payout ratio hides a huge risk for a dividend cut.

In order to avoid some negative surprises in terms of dividend cuts, I screened the S&P 500 Index by stocks with a dividend yield of more than 5 percent as well as a debt to equity ratio of less than one. The debt ratio shows that the company has more equity than debt and is solid financed. There are only five stocks that fulfilled my mentioned criteria. These are the detailed results sorted by yield:

1. AT&T (T) has a market capitalization of $178.31 billion. The company employs 256,210 people, generates revenues of $124,280.00 million and has a net income of $19,400.00 million. The firm's earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $38,952.00 million. Because of these figures, the EBITDA margin is 31.34 percent (operating margin 15.75 percent and the net profit margin finally 15.61 percent).

The total debt representing 24.64 percent of the company's assets and the total debt in relation to the equity amounts to 59.26 percent. Due to the financial situation, a return on equity of 17.90 percent was realized. Twelve trailing months earnings per share reached a value of $1.97. Last fiscal year, the company paid $1.69 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 15.27, Price/Sales 1.43 and Price/Book ratio 1.59. Dividend Yield: 5.85 percent. The beta ratio is 0.59.

2. Reynolds American (RAI) has a market capitalization of $23.15 billion. The company employs 5,700 people, generates revenues of $8,551.00 million and has a net income of $1,329.00 million. The firm's earnings before interest, taxes, depreciation and amortization amounts to $2,570.00 million. Because of these figures, the EBITDA margin is 30.05 percent (operating margin 28.29 percent and the net profit margin finally 15.54 percent).

The total debt representing 24.01 percent of the company's assets and the total debt in relation to the equity amounts to 63.00 percent. Due to the financial situation, a return on equity of 20.43 percent was realized. Twelve trailing months earnings per share reached a value of $2.28. Last fiscal year, the company paid $1.84 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 17.45, Price/Sales 2.76 and Price/Book ratio 3.63. Dividend Yield: 5.53 percent. The beta ratio is 0.58.

3. Integrys Energy Group (TEG) has a market capitalization of $4.02 billion. The company employs 4,612 people, generates revenues of $5,203.20 million and has a net income of $223.50 million. The firm's earnings before interest, taxes, depreciation and amortization amounts to $693.90 million. Because of these figures, the EBITDA margin is 13.34 percent (operating margin 8.23 percent and the net profit margin finally 4.30 percent).

The total debt representing 26.98 percent of the company's assets and the total debt in relation to the equity amounts to 89.57 percent. Due to the financial situation, a return on equity of 7.67 percent was realized. Twelve trailing months earnings per share reached a value of $3.32. Last fiscal year, the company paid $2.72 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 15.48, Price/Sales 0.77 and Price/Book ratio 1.37. Dividend Yield: 5.30 percent. The beta ratio is 0.84.

4. Federated Investors (FII) has a market capitalization of $1.94 billion. The company employs 1,334 people, generates revenues of $951.94 million and has a net income of $189.16 million. The firm's earnings before interest, taxes, depreciation and amortization amounts to $331.59 million. Because of these figures, the EBITDA margin is 34.83 percent (operating margin 32.54 percent and the net profit margin finally 19.87 percent).

The total debt representing 35.39 percent of the company's assets and the total debt in relation to the equity amounts to 83.00 percent. Due to the financial situation, a return on equity of 33.86 percent was realized. Twelve trailing months earnings per share reached a value of $1.55. Last fiscal year, the company paid $0.96 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 12.02, Price/Sales 2.03 and Price/Book ratio 3.93. Dividend Yield: 5.15 percent. The beta ratio is 0.89.

5. Ameren (AEE) has a market capitalization of $7.57 billion. The company employs 9,474 people, generates revenues of $7,638.00 million and has a net income of $151.00 million. The firm's earnings before interest, taxes, depreciation and amortization amounts to $1,681.00 million. Because of these figures, the EBITDA margin is 22.01 percent (operating margin 11.99 percent and the net profit margin finally 1.98 percent).

The total debt representing 32.90 percent of the company's assets and the total debt in relation to the equity amounts to 100.09 percent. Due to the financial situation, a return on equity of 1.78 percent was realized. Twelve trailing months earnings per share reached a value of $2.26. Last fiscal year, the company paid $1.54 in form of dividends to shareholders.

Here are the price ratios of the company: The P/E ratio is 13.81, Price/Sales 0.99 and Price/Book ratio 0.97. Dividend Yield: 5.12 percent. The beta ratio is 0.60.

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