Dividend stocks can be the foundation of a great retirement portfolio. Not only do the payments put money in your pocket, which can help hedge against any dips in the stock market, they're usually a sign of a financially sound company.
Dividends also give investors a painless opportunity to reinvest in a stock, thus compounding gains over time. However, not all income stocks live up to their full potential.
Using the payout ratio -- i.e., the percentage of profits a company returns to its shareholders as dividends -- we can get a good bead on whether a company has room to increase its dividend. Ideally, we like to see healthy payout ratios between 50% and 75%.
I run a screen to find some good stock ideas that could offer upside in terms of dividend payments.
My criteria were low payout (under 50%), low debt (under 0.5), solid growth (over 5% for the next five years) and finally a dividend yield over 3 percent. 12 stocks keep on the screen. Each has a market cap over 2 billion.
Here are 12 income stocks with payout ratios currently below 50% that could potentially double their dividends in the future easily....
CNOOC -- Yield: 6.30%
CNOOC (NYSE:CEO) employs 21,046 people, generates revenue of $42,261.79 million and has a net income of $9,263.66 million. The current market capitalization stands at $49.68 billion.CNOOC’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $21,926.47 million. The EBITDA margin is 51.88% (the operating margin is 29.46% and the net profit margin 21.92%).
Financials: The total debt represents 20.60% of CNOOC assets and the total debt in relation to the equity amounts to 35.97%. Due to the financial situation, a return on equity of 16.69% was realized by CNOOC.
Twelve trailing months earnings per share reached a value of $14.22. Last fiscal year, CNOOC paid $8.77 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.09, the P/S ratio is 1.24 and the P/B ratio is finally 0.89. The dividend yield amounts to 6.30%.
Stock Charts:
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| Long-Term Stock Price Chart of CNOOC (CEO) |
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| Long-Term Dividend Payment History of CNOOC (CEO) |
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| Long-Term Dividend Yield History of CNOOC (CEO) |
AEGON -- Yield: 4.91%
AEGON (NYSE:AEG) employs 28,000 people, generates revenue of $38,819.43 million and has a net income of $688.45 million. The current market capitalization stands at $11.90 billion.AEGON’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,103.73 million. The EBITDA margin is 2.84% (the operating margin is 1.73% and the net profit margin 1.77%).
Financials: The total debt represents 3.20% of AEGON assets and the total debt in relation to the equity amounts to 48.18%. Due to the financial situation, a return on equity of 1.71% was realized by AEGON.
Twelve trailing months earnings per share reached a value of $0.25. Last fiscal year, AEGON paid $0.14 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 22.40, the P/S ratio is 0.31 and the P/B ratio is finally 0.39. The dividend yield amounts to 4.91%.
Stock Charts:
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| Long-Term Stock Price Chart of AEGON (AEG) |
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| Long-Term Dividend Payment History of AEGON (AEG) |
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| Long-Term Dividend Yield History of AEGON (AEG) |
GameStop -- Yield: 4.67%
GameStop (NYSE:GME) employs 18,000 people, generates revenue of $9,296.00 million and has a net income of $393.10 million. The current market capitalization stands at $3.32 billion.GameStop’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $774.50 million. The EBITDA margin is 8.33% (the operating margin is 6.65% and the net profit margin 4.23%).
Financials: The total debt represents 8.38% of GameStop assets and the total debt in relation to the equity amounts to 17.20%. Due to the financial situation, a return on equity of 18.20% was realized by GameStop.
Twelve trailing months earnings per share reached a value of $3.67. Last fiscal year, GameStop paid $1.32 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.38, the P/S ratio is 0.36 and the P/B ratio is finally 1.65. The dividend yield amounts to 4.67%.
Stock Charts:
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| Long-Term Stock Price Chart of GameStop (GME) |
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| Long-Term Dividend Payment History of GameStop (GME) |
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| Long-Term Dividend Yield History of GameStop (GME) |
Principal Financial -- Yield: 3.82%
Principal Financial (NYSE:PFG) employs 14,895 people, generates revenue of $11,994.60 million and has a net income of $1,253.20 million. The current market capitalization stands at $11.32 billion.Principal Financial’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,654.00 million. The EBITDA margin is 13.79% (the operating margin is 11.93% and the net profit margin 10.45%).
Financials: The total debt represents 1.59% of Principal Financial assets and the total debt in relation to the equity amounts to 37.29%. Due to the financial situation, a return on equity of 12.41% was realized by Principal Financial.
Twelve trailing months earnings per share reached a value of $4.06. Last fiscal year, Principal Financial paid $1.50 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.70, the P/S ratio is 0.97 and the P/B ratio is finally 1.25. The dividend yield amounts to 3.82%.
Stock Charts:
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| Long-Term Stock Price Chart of Principal Financial (PFG) |
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| Long-Term Dividend Payment History of Principal Financial (PFG) |
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| Long-Term Dividend Yield History of Principal Financial (PFG) |
HollyFrontier -- Yield: 3.73%
HollyFrontier (NYSE:HFC) employs 2,704 people, generates revenue of $13,237.92 million and has a net income of $802.51 million. The current market capitalization stands at $6.07 billion.HollyFrontier’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,633.96 million. The EBITDA margin is 12.34% (the operating margin is 9.39% and the net profit margin 6.06%).
Financials: The total debt represents 12.40% of HollyFrontier assets and the total debt in relation to the equity amounts to 19.80%. Due to the financial situation, a return on equity of 13.69% was realized by HollyFrontier.
Twelve trailing months earnings per share reached a value of $3.84. Last fiscal year, HollyFrontier paid $1.31 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 9.17, the P/S ratio is 0.47 and the P/B ratio is finally 1.21. The dividend yield amounts to 3.73%.
Stock Charts:
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| Long-Term Stock Price Chart of HollyFrontier (HFC) |
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| Long-Term Dividend Payment History of HollyFrontier (HFC) |
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| Long-Term Dividend Yield History of HollyFrontier (HFC) |
Novartis AG -- Yield: 3.62%
Novartis AG (NYSE:NVS) employs 118,700 people, generates revenue of $50,359.00 million and has a net income of $7,028.00 million. The current market capitalization stands at $194.67 billion.Novartis AG’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15,228.00 million. The EBITDA margin is 30.24% (the operating margin is 17.56% and the net profit margin 13.96%).
Financials: The total debt represents 16.65% of Novartis AG assets and the total debt in relation to the equity amounts to 28.43%. Due to the financial situation, a return on equity of 9.49% was realized by Novartis AG.
Twelve trailing months earnings per share reached a value of $2.88. Last fiscal year, Novartis AG paid $2.73 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.35, the P/S ratio is 3.95 and the P/B ratio is finally 2.27. The dividend yield amounts to 3.62%.
Stock Charts:
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| Long-Term Stock Price Chart of Novartis AG (NVS) |
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| Long-Term Dividend Payment History of Novartis AG (NVS) |
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| Long-Term Dividend Yield History of Novartis AG (NVS) |
Tootsie Roll Industries -- Yield: 1.04%
Tootsie Roll Industries (NYSE:TR) employs 2,000 people, generates revenue of $540.11 million and has a net income of $66.13 million. The current market capitalization stands at $2.11 billion.Tootsie Roll Industries’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $111.47 million. The EBITDA margin is 20.64% (the operating margin is 16.86% and the net profit margin 12.24%).
Financials: The total debt represents 0.89% of Tootsie Roll Industries assets and the total debt in relation to the equity amounts to 1.16%. Due to the financial situation, a return on equity of 9.52% was realized by Tootsie Roll Industries.
Twelve trailing months earnings per share reached a value of $1.05. Last fiscal year, Tootsie Roll Industries paid $0.34 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 32.05, the P/S ratio is 3.89 and the P/B ratio is finally 3.03. The dividend yield amounts to 1.04%.
Stock Charts:
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| Long-Term Stock Price Chart of Tootsie Roll Industries (TR) |
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| Long-Term Dividend Payment History of Tootsie Roll Industries (TR) |
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| Long-Term Dividend Yield History of Tootsie Roll Industries (TR) |
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| 12 Top Yielding Stocks With Potential To Double Dividends (click to enlarge) |
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