11 Low-Debt Dividend Stocks With Strong Sources of Profitability

When choosing a source of dividend income, it is important to check for encouraging trends in profitability. If a company is becoming less profitable or their profitability starts coming from less preferred sources, their dividend yield may be in danger. Debt is also an important consideration, as debtholders are always paid before dividends. When company debt rises significantly, it also endangers the dividend yield. With these ideas in mind, we screened dividend stocks (with dividend yield above 2% and a sustainable payout ratio below 35%) for those coming from companies with low debt, with most recent quarter total debt to assets below 0.2. We then screened for those companies with strong sources of return on equity (ROE) profitability, by using DuPont analysis. ROE can be broken up into three components such that changes in ROE can be attributed to those components. ROE: = (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net... Read more