Dividend Sustainability Among 5 Stocks

The demand and popularity of high paying dividends stocks has been constantly increasing due to the low-interest rate environment set by the Fed. Nevertheless, investors are always able to find stock with high annual dividends. The question is, are the dividends of these corporations sustainable? Home Depot (HD): Home Depot has a current annual dividend of $1.16, a yield of 2.7%, and a payout ratio of 43%. Cash flow has been solid and growing, in fact the stock has recently reached a 52-year high and its momentum is expected to grow because of its stronger financial position in comparison to other stocks. For instance, Home Depot has a much higher dividend and yield than Lowe's (LOW), which currently has annual dividend and yield of 0.56 and 2.10%, respectively. In fiscal year 2011, the stock had sales growth and income growth of 2.80% and 27.40%, respectively. Home Depot has a price... Read more