8/20/2012

12 Dividend Aristocrats With Best Debt Ratios

Dividend Aristocrats With Low Debt To Equity Ratios Researched By “long-term-investments.blogspot.com. Dividend growth depends on the total amount of debt which the company has outstanding. The higher the debt level, the higher the risk for a dividend cut.

An important ratio to judge the financial balance sheet health of a stock is the debt to equity ratio. The figure shows how many percent of the equity is covered by debt. A ratio below one is often acceptable if the cash flow is strong enough. However, I screened the investment category “Dividend Aristocrats” (stocks with more than 25 years in consecutive dividend hikes, selected by Standard & Poor’s) by companies with low debt to equity ratios of less than 0.3. Twelve companies fulfilled these criteria of which seven are currently recommended to buy.

Here are my favorite stocks:
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Johnson & Johnson (NYSE:JNJ) has a market capitalization of $186.21 billion. The company employs 117,900 people, generates revenue of $65,030.00 million and has a net income of $9,672.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15,993.00 million. The EBITDA margin is 24.59 percent (operating margin 19.01 percent and net profit margin 14.87 percent). 

Financial Analysis: The total debt represents 17.27 percent of the company’s assets and the total debt in relation to the equity amounts to 34.39 percent. Due to the financial situation, a return on equity of 17.02 percent was realized. Twelve trailing months earnings per share reached a value of $3.14. Last fiscal year, the company paid $2.25 in form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 21.54, P/S ratio 2.87 and P/B ratio 3.24. Dividend Yield: 3.60 percent. The beta ratio is 0.54.


Long-Term Stock History Chart Of Johnson & Johnson (Click to enlarge)
Long-Term Dividends History of Johnson & Johnson (JNJ) (Click to enlarge)
Long-Term Dividend Yield History of Johnson & Johnson (NYSE: JNJ) (Click to enlarge)

Walgreen Company (NYSE:WAG) has a market capitalization of $30.93 billion. The company employs 176,000 people, generates revenue of $72,184.00 million and has a net income of $2,714.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $5,393.00 million. The EBITDA margin is 7.47 percent (operating margin 6.05 percent and net profit margin 3.76 percent). 

Financial Analysis: The total debt represents 8.77 percent of the company’s assets and the total debt in relation to the equity amounts to 16.23 percent. Due to the financial situation, a return on equity of 18.56 percent was realized. Twelve trailing months earnings per share reached a value of $2.90. Last fiscal year, the company paid $0.75 in form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.44, P/S ratio 0.43 and P/B ratio 2.15. Dividend Yield: 3.07 percent. The beta ratio is 0.99.
Long-Term Stock History Chart Of Walgreen Company (Click to enlarge)
Long-Term Dividends History of Walgreen Company (WAG) (Click to enlarge)
Long-Term Dividend Yield History of Walgreen Company (NYSE: WAG) (Click to enlarge)

AFLAC Incorporated (NYSE:AFL) has a market capitalization of $21.59 billion. The company employs 8,562 people, generates revenue of $22,171.00 million and has a net income of $1,964.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6,761.00 million. The EBITDA margin is 30.49 percent (operating margin 13.50 percent and net profit margin 8.86 percent). 

Financial Analysis: The total debt represents 2.81 percent of the company’s assets and the total debt in relation to the equity amounts to 24.32 percent. Due to the financial situation, a return on equity of 15.99 percent was realized. Twelve trailing months earnings per share reached a value of $5.46. Last fiscal year, the company paid $1.23 in form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.44, P/S ratio 0.97 and P/B ratio 1.59. Dividend Yield: 2.86 percent. The beta ratio is 1.84.


Long-Term Stock History Chart Of AFLAC Incorporated (Click to enlarge)
Long-Term Dividends History of AFLAC Incorporated (AFL) (Click to enlarge)
Long-Term Dividend Yield History of AFLAC Incorporated (NYSE: AFL) (Click to enlarge)

Exxon Mobil (NYSE:XOM) has a market capitalization of $405.97 billion. The company employs 82,100 people, generates revenue of $486,429.00 million and has a net income of $42,206.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $89,087.00 million. The EBITDA margin is 18.31 percent (operating margin 15.06 percent and net profit margin 8.68 percent). 

Financial Analysis: The total debt represents 5.15 percent of the company’s assets and the total debt in relation to the equity amounts to 11.03 percent. Due to the financial situation, a return on equity of 27.26 percent was realized. Twelve trailing months earnings per share reached a value of $9.52. Last fiscal year, the company paid $1.85 in form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.24, P/S ratio 0.84 and P/B ratio 2.71. Dividend Yield: 2.58 percent. The beta ratio is 0.53.


Long-Term Stock History Chart Of Exxon Mobil Corpo... (Click to enlarge)
Long-Term Dividends History of Exxon Mobil Corpo... (XOM) (Click to enlarge)
Long-Term Dividend Yield History of Exxon Mobil Corpo... (NYSE: XOM) (Click to enlarge)

Hormel Foods (NYSE:HRL) has a market capitalization of $7.50 billion. The company employs 19,500 people, generates revenue of $7,895.09 million and has a net income of $479.20 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $849.17 million. The EBITDA margin is 10.76 percent (operating margin 9.40 percent and net profit margin 6.07 percent). 

Financial Analysis: The total debt represents 5.89 percent of the company’s assets and the total debt in relation to the equity amounts to 9.41 percent. Due to the financial situation, a return on equity of 18.75 percent was realized. Twelve trailing months earnings per share reached a value of $1.75. Last fiscal year, the company paid $0.51 in form of dividends to shareholders. 

Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.30, P/S ratio 0.96 and P/B ratio 2.85. Dividend Yield: 2.09 percent. The beta ratio is 0.42.


Long-Term Stock History Chart Of Hormel Foods Corp... (Click to enlarge)
Long-Term Dividends History of Hormel Foods Corp... (HRL) (Click to enlarge)
Long-Term Dividend Yield History of Hormel Foods Corp... (NYSE: HRL) (Click to enlarge)


Take a closer look at the full table of Dividend Aristocrats With Low Debt Ratios. The average price to earnings ratio (P/E ratio) amounts to 16.48 and forward P/E ratio is 14.40. The dividend yield has a value of 2.58 percent. Price to book ratio is 2.90 and price to sales ratio 1.94. The operating margin amounts to 17.48 percent and the beta ratio is 0.92.

Here is the full table with some fundamentals (TTM):

12 Dividend Aristocrats With Best Debt Ratios (Click to enlarge)

Related stock ticker symbols:
CINF, JNJ, GPC, WAG, AFL, ADP, XOM, CB, TROW, HRL, GWW, BEN

Selected Articles:


  
I am long JNJ, WAG. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.

For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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