In order to select companies with the financial capacity to continue their dividend payments in the future, we will specify a dividend-coverage ratio of at least 150 percent. The dividend coverage ratio is found by taking the company’s earnings per share for the past 12 months and dividing by the dividends paid over the past year. A high dividend-coverage ratio indicates a company has the earnings to continue paying out the dividend, and perhaps even raise it in the future.
Marathon Oil Corporation. The stock pays a handsome dividend of 3.2 percent and has a very high-dividend coverage ratio of 471 percent. Weyerhaeuser. This forestry giant also makes our list with an extremely low P/E ratio of 10.1 and a 3.4 percent dividend yield.
Seagate Technology. Seagate pays a very attractive dividend of 3.9 percent and has a 222 percent dividend coverage ratio. Microsoft Corporation. Microsoft currently pays a 2.9 percent dividend and has a strong track record of dividend increases over the past 10 years.
Source: U.S. News and World Report
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