We like companies that have little or no debt, because these companies tend to have long-term competitive advantage. We are in the middle of European Debt crisis. The lower the company's debt ratio, the more flexibility the company has during the poor economic conditions.
Below, we compiled a list of eight dividend stocks that have dividend yields higher than 4%, market cap higher than $20 billion and total debt/equity ratios of lower than 0.65. We have obtained market data from Finviz and MSN Money.
Stock | Market Cap | Sector* | Dividend Yield | P/E | Beta | Estimated EPS growth next 5 years |
Bristol-Myers Squibb Company (BMY) | 55.3 | Healthcare | 4.2% | 14.7 | 0.46 | -0.1% |
ConocoPhillips (COP) | 64.3 | Basic Materials | 5.2% | 5.6 | 1.13 | 0.4% |
Eli Lilly & Co. (LLY) | 46.9 | Healthcare | 4.9% | 10.5 | 0.68 | -6.8% |
Merck & Co. (MRK) | 115.0 | Healthcare | 4.4% | 16.7 | 0.62 | 4.2% |
Reynolds American (RAI) | 23.3 | Consumer Goods | 5.8% | 17.9 | 0.57 | 7.0% |
Southern Copper Corp. (SCCO) | 23.9 | Basic Materials | 7.2% | 9.7 | 1.58 | 10.8% |
AT&T (T) | 197.3 | Technology | 5.2% | 48.8 | 0.58 | 9.0% |
Thomson Reuters Corporation (TRI) | 23.1 | Technology | 4.6% | N/A | 0.94 | 9.3% |
Click to enlarge all images.
* TRI has a forward P/E ratio of 12.7. The above table shows the trailing P/E ratios.
Bristol-Myers Squibb (BMY) is a biopharmaceutical company operating worldwide. BMY recently traded at $32.72 and has a 4.2% dividend yield. BMY gained 19.2% during the past 12 months. The stock has a market cap of $55.3 billion, P/E ratio of 14.7 and Total Debt/Equity ratio of 0.33. BMY also had an EPS growth rate of 28.4% during the last five years.
ConocoPhillips (COP) is one of the leading integrated energy companies. COP recently traded at $50.82 and has a 5.2% dividend yield. COP lost 5.7% during the past 12 months. The stock has a market cap of $64.3 billion, P/E ratio of 5.6 and Total Debt/Equity ratio of 0.43. COP also had an EPS growth rate of -1.5% during the last five years.
Eli Lilly and Company (LLY) provides pharmaceutical products worldwide. Eli Lilly recently reported some news with a strong Q1 with EPS of $0.92 versus consensus estimates of $0.78. LLY recently traded at $40.44 and has a 4.9% dividend yield. LLY gained 10% during the past 12 months. The stock has a market cap of $46.9 billion, P/E ratio of 10.5 and Total Debt/Equity ratio of 0.36. LLY also had an EPS growth rate of 9.8% during the last five years.
Merck & Co. (MRK) provides various health solutions worldwide. MRK recently traded at $37.82 and has a 4.4% dividend yield. MRK gained 5.9% during the past 12 months. The stock has a market cap of $115 billion, P/E ratio of 16.7 and Total Debt/Equity ratio of 0.33. MRK also had an EPS growth rate of 0% during the last five years.
Reynolds American (RAI) manufactures and sells cigarette and other tobacco products in the United States. RAI recently traded at $40.69 and has a 5.8% dividend yield. RAI gained 8.8% during the past 12 months. The stock has a market cap of $23.3 billion, P/E ratio of 17.9 and Total Debt/Equity ratio of 0.61. RAI also had an EPS growth rate of 4.6% during the last five years.
Southern Copper Corp. (SCCO) is involved in the mining, exploration and refining of copper ores. SCCO recently traded at $28.16 and has a 7.2% dividend yield. SCCO lost 15.1% during the past 12 months. The stock has a market cap of $23.9 billion, P/E ratio of 9.7 and Total Debt/Equity ratio of 0.61. SCCO also had an EPS growth rate of 3.7% during the last five years.
AT&T (T) is a one the leading telecommunication companies operating worldwide. T recently traded at $33.66 and has a 5.2% dividend yield. T gained 13.6% during the past 12 months. The stock has a market cap of $197.3 billion, P/E ratio of 48.8 and Total Debt/Equity ratio of 0.63. T also had an EPS growth rate of -18.8% during the last five years.
Thomson Reuters Corporation (TRI) provides intelligent information for businesses and professionals worldwide. TRI recently traded at $27.81 and has a 4.6% dividend yield. TRI lost 26% during the past 12 months. The stock has a market cap of $23.1 billion, P/E ratio of N/A and Total Debt/Equity ratio of 0.46. TRI also had an EPS growth rate of 5.1% during the last five years.
Overall, we like these dividend stocks. Most of them are trading at more attractive levels and they will attract a lot of investor demand if/when Greece exits the euro. Dividend stocks were great investments in 2011 and they will be in 2012 as well.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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