12 Low-Debt Dividend Stocks Undervalued by Target Price

If you are considering dividend stocks as a source of income, one thing to keep in mind is company debt. High levels of debt can put a wedge between firm value and the value to shareholders by directing cash flows towards high interest payments, and by decreasing financial flexibility. After all, debtholders are always paid before dividends. We ran a screen on low-debt dividend stocks, with most recent quarter total debt to assets below 0.20 and paying a dividend yield above 2%. We also controlled for sustainable payout ratios below 35%. We then screened for those trading at significant discounts relative to target price, possibly indicating undervalued opportunities.Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.Your browser does not support iframes. We also created a price-weighted index of... Read more