Everybody from the dividend growth community loves dividends and growing dividends. But investing into stocks is also risky and you could lose some money if your company is on the wrong growth path.
As a result, your extraordinary strong dividend grower will cut its dividends or hold them for a longer time. In order to avoid the real big mistakes, you should look at several financial indicators of the company. The amount of debt is a major issue to evaluate the stability of future dividends.
Today I would like to show you five of the top dividend paying stocks that have in my view a high possibility to keep dividends alive or to hike dividends in the future.
I screened the market by companies with a high percentage of cash and current assets in relative to their short-term liabilities. I also looked at high operating margins above the sector average. This shows the ability to hike prices and demonstrate market strength.
Below is a detailed snap shot of my favorite results.
My top 5 stock picks...
PG&E (NYSE:PCG) has a market capitalization of $18.43 billion. The company employs 20,583 people, generates revenue of $15.040 billion and has a net income of $830.00 million. PG&E’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3.901 billion. The EBITDA margin is 25.94 percent (the operating margin is 11.26 percent and the net profit margin 5.52 percent).
Financial Analysis: The total debt represents 25.57 percent of PG&E’s assets and the total debt in relation to the equity amounts to 102.56 percent. Due to the financial situation, a return on equity of 6.48 percent was realized by PG&E. Twelve trailing months earnings per share reached a value of $1.62. Last fiscal year, PG&E paid $1.82 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.32, the P/S ratio is 1.23 and the P/B ratio is finally 1.36. The dividend yield amounts to 4.42 percent and the beta ratio has a value of 0.23.
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| Long-Term Stock Price Chart Of PG&E (PCG) |
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| Long-Term Dividend Payment History of PG&E (PCG) |
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| Long-Term Dividend Yield History of PG&E (PCG) |
Lorillard (NYSE:LO) has a market capitalization of $19.52 billion. The company employs 2,900 people, generates revenue of $6.623 billion and has a net income of $1.099 billion. Lorillard’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.077 billion. The EBITDA margin is 31.36 percent (the operating margin is 28.36 percent and the net profit margin 16.59 percent).
Financial Analysis: The total debt represents 91.61 percent of Lorillard’s assets. Twelve trailing months earnings per share reached a value of $3.20. Last fiscal year, Lorillard paid $2.07 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.55, the P/S ratio is 2.93 and the P/B ratio is finally not calculable. The dividend yield amounts to 4.18 percent and the beta ratio has a value of 0.37.
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| Long-Term Stock Price Chart Of Lorillard (LO) |
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| Long-Term Dividend Payment History of Lorillard (LO) |
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| Long-Term Dividend Yield History of Lorillard (LO) |
Chevron (NYSE:CVX) has a market capitalization of $231.86 billion. The company employs 62,000 people, generates revenue of $241.909 billion and has a net income of $26.336 billion. Chevron’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $59.975 billion. The EBITDA margin is 24.79 percent (the operating margin is 19.15 percent and the net profit margin 10.89 percent).
Financial Analysis: The total debt represents 5.23 percent of Chevron’s assets and the total debt in relation to the equity amounts to 8.93 percent. Due to the financial situation, a return on equity of 20.30 percent was realized by Chevron. Twelve trailing months earnings per share reached a value of $12.22. Last fiscal year, Chevron paid $3.51 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.86, the P/S ratio is 0.95 and the P/B ratio is finally 1.71. The dividend yield amounts to 3.33 percent and the beta ratio has a value of 0.95.
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| Long-Term Stock Price Chart Of Chevron (CVX) |
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| Long-Term Dividend Payment History of Chevron (CVX) |
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| Long-Term Dividend Yield History of Chevron (CVX) |
Microsoft (NASDAQ:MSFT) has a market capitalization of $310.54 billion. The company employs 99,000 people, generates revenue of $77.849 billion and has a net income of $21.863 billion. Microsoft’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $30.519 billion. The EBITDA margin is 39.20 percent (the operating margin is 34.11 percent and the net profit margin 28.08 percent).
Financial Analysis: The total debt represents 10.95 percent of Microsoft’s assets and the total debt in relation to the equity amounts to 19.76 percent. Due to the financial situation, a return on equity of 30.09 percent was realized by Microsoft. Twelve trailing months earnings per share reached a value of $2.68. Last fiscal year, Microsoft paid $0.92 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.87, the P/S ratio is 4.06 and the P/B ratio is finally 3.99. The dividend yield amounts to 2.96 percent and the beta ratio has a value of 0.97.
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| Long-Term Stock Price Chart Of Microsoft (MSFT) |
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| Long-Term Dividend Payment History of Microsoft (MSFT) |
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| Long-Term Dividend Yield History of Microsoft (MSFT) |
Johnson & Johnson (NYSE:JNJ) has a market capitalization of $266.06 billion. The company employs 127,600 people, generates revenue of $67.224 billion and has a net income of $10.514 billion. Johnson & Johnson’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $20.811 billion. The EBITDA margin is 30.96 percent (the operating margin is 20.49 percent and the net profit margin 15.64 percent).
Financial Analysis: The total debt represents 13.32 percent of Johnson & Johnson’s assets and the total debt in relation to the equity amounts to 24.94 percent. Due to the financial situation, a return on equity of 17.81 percent was realized by Johnson & Johnson. Twelve trailing months earnings per share reached a value of $4.48. Last fiscal year, Johnson & Johnson paid $2.40 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 21.04, the P/S ratio is 3.96 and the P/B ratio is finally 3.97. The dividend yield amounts to 2.80 percent and the beta ratio has a value of 0.61.
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| Long-Term Stock Price Chart Of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Payment History of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
*I am long LO, JNJ, MSFT. 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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