Safe stocks have a higher priority for me. I believe that I don’t need a bigger return when I try to avoid the real big risks of investing. Every cent I don’t lose with my current holdings is also a cent that I don’t need to earn with other stocks. That's my philosophy. A real problem that affects the stock price is the debt situation. While everybody is only talking about growth and future potential, I do look at these ratios and the possibilities to repay the debt. Remember, you are a shareholder and get your dividends after loan and interest repayments.
Debt overloaded stocks have the problem that they need decades to reduce this debt if they are working in a non-growing industry. A stock with a bigger cash amount on banks is in my view a better alternative. The company has more possibilities to grow and if it doesn’t find a solution for investing the money, it can repurchase its own shares or boost the current dividend. Today, I want to discover some of the best dividend growth stocks with a very long dividend growth history and a very low leverage risk. I selected 109 Dividend Champions and screened them by a debt to equity ratio of less than 0.1. Thirteen stocks remained of which seven have a buy or better ratio. Here are my favorite stocks: Chevron Corporation (CVX), Automatic Data Processing (ADP) and Hormel Foods (HRL).
Source: Guru Focus
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