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Dividend Stocks Under $15 with No Debt and High Yields
07/14/2014 7:00 am EST
Nowadays, everyone is seeking out more dividends, which is why the staff at Kapitall.com believes these dividend stocks with no debt deserve a closer look.
If you haven't heard, dividend stocks are all the rage. Investors want yields, and dividend stocks currently offer the best ones.
However, high yields aren't the only factors investors should take into consideration when selecting dividend stocks. After all, companies can raise, cut, or halt dividend payments whenever they see fit, and high yields can make it difficult for companies to sustain their dividend payments—especially if they experience several quarters of bad earnings.
Income investors need to take a much closer look at a company's financials to obtain a better picture of the firm's ability to continue and increase dividend payments down the line.
We ran a dividend stock screen with this in mind. To begin, we screened for high yield dividend stocks with yields between 5% and 10%. Next, we looked for stocks with a low debt/equity ratio below 0.1. Debt/equity gives investors a picture of how much equity and debt a company is using to pay for its assets. It's calculated by dividing total liabilities by stockholders' equity.
When a company has a high debt/equity ratio, it means that it's relying heavily on debt to operate and grow, which has the potential to impact earnings down the line (interest on the debt becomes an added expense).
If earnings are on a downward slope, a company is more likely to reduce or stop dividend payments. Meanwhile, a low debt/equity ratio is an encouraging indicator of a firm's stability, including its ability to stay afloat if things take a turn for the worse.
Finally, in order to further narrow down our list, we decided to limit our group to stocks under $15.
We were left with nine companies on our list. Do you think these dividend stocks with no debt will be able to sustain their high yields? Use this list as a starting point for your own analysis.
Click on the interactive chart to view data over time.
1. ATA, Inc. (ATAI): Provides computer-based testing services in the People's Republic of China. Market cap at $85.75M, most recent closing price at $3.97.
2. Capitol Federal Financial, Inc. (CFFN): Operates as the holding company for Capitol Federal Savings Bank that provides various banking products and services in Kansas. Market cap at $1.73B, most recent closing price at $12.10.
3. Compuware Corporation (CPWR): Provides software and Web performance solutions, professional services, and application services. Market cap at $2.3B, most recent closing price at $10.62.
4. CTC Media, Inc. (CTCM): Operates as an independent broadcasting company in Russia. Market cap at $1.77B, most recent closing price at $11.37.
5. NL Industries, Inc. (NL): Operates in the component products industry in the United States, Canada, and Taiwan. Market cap at $554.4M, most recent closing price at $11.39.
6. New Mountain Finance Corporation (NMFC): Market cap at $579.64M, most recent closing price at $15.19.
7. Permian Basin Royalty Trust (PBT): Permian Basin Royalty Trust owns overriding royalty rights in mineral properties in the United States. Market cap at $615.7M, most recent closing price at $13.21.
8. PetMed Express, Inc. (PETS): PetMed Express, Inc., doing business as 1-800-PetMeds, markets non-prescription and prescription pet medications; and other health products for dogs, cats, and horses. Market cap at $262.41M, most recent closing price at $13.17.
9. United Online, Inc. (UNTD): Provides consumer products and services over the Internet, primarily in the United States and internationally. Market cap at $156.01M, most recent closing price at $11.55.
By the Staff of Kapitall.com
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