8 Dividend Aristocrats With Huge Income Growth Potential

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Includes: BCR, CB, DOV, GWW, HRL, SIAL, WBA, XOM
by: Dividend Screen

Investors are hunting for yields and growth. Dividend investors have an additional unilateral view on dividends. The disadvantage is that many high-yielding dividend stocks also have high payout ratios and huge debt burdens. They are not to recommend because an additional dividend potential is not really given if the growth slows. Let’s take a look into the Dividend Aristocrat’s Index to scout for stocks with healthy future dividend growth.

I screened 42 Dividend Aristocrats by low debt and payout ratios. As criteria, I decided to select a payout ratio of less than 30 percent as well as a debt-to-equity ratio of under 0.3. Exactly 8 stocks fulfilled these criteria, of which 3 are yielding above 2 percent. Here are the results sorted by dividend yield:

1. Walgreen (WAG) is acting within the drug stores industry. The company has a market capitalization of $30.4 billion, generates revenues in an amount of $72.2 billion and a net income of $2.7 billion. Its following P/E ratio is 11.4 and forward price-to-earnings ratio 10.3, Price/Sales 0.4 and Price/Book ratio 2.1. Dividend Yield: 2.7 percent. The payout ratio amounts to 25.2 percent and debt-to-equity ratio is 0.16.

2. Exxon Mobil Corporation (NYSE:XOM) is acting within the major integrated oil and gas industry. The company has a market capitalization of $382.7 billion, generates revenues in an amount of $440.0 billion and a net income of $37.9 billion. Its following P/E ratio is 10.3 and forward price-to-earnings ratio 9.4, Price/Sales 0.9 and Price/Book ratio 2.5. Dividend Yield: 2.4 percent. The payout ratio amounts to 23.6 percent and debt-to-equity ratio is 0.11.

3. The Chubb Corporation (NYSE:CB) is acting within the property and casualty insurance industry. The company has a market capitalization of $18.7 billion, generates revenues in an amount of $13.5 billion and a net income of $2.1 billion. Its following P/E ratio is 9.4 and forward price to earnings ratio 10.8, Price/Sales 1.4 and Price/Book ratio 1.2. Dividend Yield: 2.4 percent. The payout ratio amounts to 21.2 percent and debt-to-equity ratio is 0.25.

4. Dover (NYSE:DOV) is acting within the diversified machinery industry. The company has a market capitalization of $10.0 billion, generates revenues in an amount of $7.9 billion and a net income of $846.9 million. Its following P/E ratio is 12.0 and forward price-to-earnings ratio 10.8, Price/Sales 1.3 and Price/Book ratio 2.0. Dividend Yield: 2.4 percent. The payout ratio amounts to 24.3 percent and debt-to-equity ratio is 0.45.

5. Hormel Foods (NYSE:HRL) is acting within the meat products industry. The company has a market capitalization of $7.6 billion, generates revenues in an amount of $7.9 billion and a net income of $478.0 million. Its following P/E ratio is 16.3 and forward price-to-earnings ratio 16.2, Price/Sales 1.0 and Price/Book ratio 2.9. Dividend Yield: 1.8 percent. The payout ratio amounts to 27.2 percent and debt-to-equity ratio is 0.09.

6. W.W. Grainger (NYSE:GWW) is acting within the industrial equipment wholesale industry. The company has a market capitalization of $11.5 billion, generates revenues in an amount of $7.6 billion and a net income of $597.1 million. Its following P/E ratio is 19.6 and forward price-to-earnings ratio 16.9, Price/Sales 1.5 and Price/Book ratio 4.6. Dividend Yield: 1.6 percent. The payout ratio amounts to 26.5 percent and debt-to-equity ratio is 0.20.

7. Sigma-Aldrich Corporation (NASDAQ:SIAL) is acting within the specialty chemicals industry. The company has a market capitalization of $8.0 billion, generates revenues in an amount of $2.4 billion and a net income of $419.0 million. Its following P/E ratio is 19.3 and forward price-to-earnings ratio 16.2, Price/Sales 3.3 and Price/Book ratio 3.5. Dividend Yield: 1.1 percent. The payout ratio amounts to 19.8 percent and debt-to-equity ratio is 0.23.

8. CR Bard (NYSE:BCR) is acting within the medical instruments and supplies industry. The company has a market capitalization of $7.4 billion, generates revenues in an amount of $2.8 billion and a net income of $342.5 million. Its following P/E ratio is 22.9 and forward price-to-earnings ratio 12.2, Price/Sales 2.6 and Price/Book ratio 4.0. Dividend Yield: 0.9 percent. The payout ratio amounts to 18.4 percent and debt-to-equity ratio is 0.48.

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