Dividends4Life: Dividend Stocks With Low Debt Burdens

Dividend Stocks With Low Debt Burdens

Posted by D4L | Thursday, August 22, 2013 | | 0 comments »

Interest rates on Treasuries have increased by nearly a full percentage point year to date, to above 2.6%, but are still moderately low in historical terms (they were around 4% in mid 2008, and around 3.5% in mid 2009). As a result there is still room for interest rates to rise, which would in turn increase the interest rates on corporate bonds and therefore the interest rate paid by companies with significant debt loads. For companies with high dividend yields, it is crucial to preserve cash flow in order to afford dividend payments and therefore income investors who worry about how a rise in rates might affect dividend stocks should be aware of prospective picks' debt burdens. Using data from Fidelity, here are five stocks which pay a dividend yield of at least 3.5% at current prices and which have a debt-to-equity ratio of less than 20%:

Maxim Integrated Products (MXIM), an $8.3 billion market cap semiconductor company, also satisfies our criteria; in fact, Maxim has more cash on hand than its total debt. Another tech company with less debt than cash- though both figures are low- is enterprise software company Compuware (CPWR). Also offering a high yield, though its business is quite risky, is GPS device provider Garmin (GRMN). Finally, Mercury General (MCY), an insurance company focused on providing auto insurance coverage, is another low-debt high-yield company.

Source: Seeking Alpha

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