Wednesday, September 17, 2014

Top Dividend Stocks With No Debt But High Cash On Balance Sheet

I hate it when one of my stock holdings cut its dividends. Tesco did it recently and I will lose now 75 percent of my income from the stake. 

For sure, it’s not much because the stock has only a portfolio share of around one percent but I've bought this share in hopes to get a stable output or a rising long-term dividend with low taxation.


Recently I wrote about stocks that have lower debt amounts on their balance sheets. I made this with thoughts in my mind to avoid a future dividend cut. 


Today I will strengthen my criteria and tighten the focus on stocks with no debt and high cash amounts. That's the highest level of safeness every investor could reach.

I found the graphic on US Today with some interesting stocks in terms of cash and debt (look at the end of this article). 

The list shows 26 U.S. stocks with no debt! There are more available on the market but those are some of the biggest and you might know them.

Cash is king and large capitalization too. I love big capitalized stocks because of their good business diversification. Those stocks have often a well diversified product portfolio and great sales teams all over the world. 

Big companies also have more money for research and development and offer more money and social benefits to the best talented people in the world.

If one country or currency suffers, a different one can eliminate the problems with sales growth. No every problem can be solved so easy but investors have a better chance to make a good return.



No debt could also mean more money for shareholders (Dividends or Share Buybacks) or a higher growth. The company can invest into the future by acquisitions or product investments.

In the end, everything is a question of the ability of the management team; a good team can boost the company while a bad head can bring them down.

Below are five of my favorite stocks with no debt and high cash mountains.


Garmin (NASDAQ:GRMN) has a market capitalization of $10.46 billion. The company employs 10,086 people, generates revenue of $2.631 billion and has a net income of $612.41 million. Garmin’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $652.84 million. The EBITDA margin is 24.81 percent (the operating margin is 21.81 percent and the net profit margin 23.27 percent).

Financials: The total debt represents 0.00 percent of Garmin’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 17.03 percent was realized by Garmin. Twelve trailing months earnings per share reached a value of $3.33. Last fiscal year, Garmin paid $1.80 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.31, the P/S ratio is 3.98 and the P/B ratio is finally 2.90. The dividend yield amounts to 3.53 percent and the beta ratio has a value of 1.07.



Long-Term Stock Price Chart Of Garmin (GRMN)
Long-Term Dividend Payment History of Garmin (GRMN)
Long-Term Dividend Yield History of Garmin (GRMN)
Fastenal (NASDAQ:FAST) has a market capitalization of $13.44 billion. The company employs 17,277 people, generates revenue of $3.326 billion and has a net income of $448.64 million. Fastenal’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $776.20 million. The EBITDA margin is 23.34 percent (the operating margin is 21.43 percent and the net profit margin 13.49 percent).

Financial Analysis: The total debt represents 0.00 percent of Fastenal’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 26.92 percent was realized by Fastenal. Twelve trailing months earnings per share reached a value of $1.55. Last fiscal year, Fastenal paid $0.80 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 29.23, the P/S ratio is 4.04 and the P/B ratio is finally 7.58. The dividend yield amounts to 2.21 percent and the beta ratio has a value of 1.06.



Long-Term Stock Price Chart Of Fastenal (FAST)
Long-Term Dividend Payment History of Fastenal (FAST)
Long-Term Dividend Yield History of Fastenal (FAST)

QUALCOMM (NASDAQ:QCOM) has a market capitalization of $127.55 billion. The company employs 31,000 people, generates revenue of $24.866 billion and has a net income of $6.845 billion. QUALCOMM’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.578 billion. The EBITDA margin is 34.50 percent (the operating margin is 28.78 percent and the net profit margin 27.53 percent).


Financial Analysis: The total debt represents 0.04 percent of QUALCOMM’s assets and the total debt in relation to the equity amounts to 0.05 percent. Due to the financial situation, a return on equity of 19.69 percent was realized by QUALCOMM. Twelve trailing months earnings per share reached a value of $4.15. Last fiscal year, QUALCOMM paid $1.20 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.32, the P/S ratio is 5.13 and the P/B ratio is finally 3.55. The dividend yield amounts to 2.21 percent and the beta ratio has a value of 1.19.



Long-Term Stock Price Chart Of QUALCOMM (QCOM)
Long-Term Dividend Payment History of QUALCOMM (QCOM)
Long-Term Dividend Yield History of QUALCOMM (QCOM)

Avago Technologies (NASDAQ:AVGO) has a market capitalization of $20.66 billion. The company employs 4,800 people, generates revenue of $2.520 billion and has a net income of $552.00 million. Avago Technologies’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $719.00 million. The EBITDA margin is 28.53 percent (the operating margin is 21.87 percent and the net profit margin 21.90 percent).


Financial Analysis: The total debt represents 0.06 percent of Avago Technologies’s assets and the total debt in relation to the equity amounts to 0.07 percent. Due to the financial situation, a return on equity of 20.81 percent was realized by Avago Technologies. Twelve trailing months earnings per share reached a value of $2.38. Last fiscal year, Avago Technologies paid $0.80 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 34.55, the P/S ratio is 8.20 and the P/B ratio is finally 7.09. The dividend yield amounts to 1.41 percent and the beta ratio has a value of 0.99.



Long-Term Stock Price Chart Of Avago Technologies (AVGO)
Long-Term Dividend Payment History of Avago Technologies (AVGO)
Long-Term Dividend Yield History of Avago Technologies (AVGO)

Whole Foods Market (NASDAQ:WFM) has a market capitalization of $14.14 billion. The company employs 56,700 people, generates revenue of $12.917 billion and has a net income of $551.00 million. Whole Foods Market’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,234.00 million. The EBITDA margin is 9.55 percent (the operating margin is 6.84 percent and the net profit margin 4.27 percent).


Financial Analysis: The total debt represents 0.49 percent of Whole Foods Market’s assets and the total debt in relation to the equity amounts to 0.70 percent. Due to the financial situation, a return on equity of 14.35 percent was realized by Whole Foods Market. Twelve trailing months earnings per share reached a value of $1.53. Last fiscal year, Whole Foods Market paid $0.40 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.54, the P/S ratio is 1.09 and the P/B ratio is finally 3.76. The dividend yield amounts to 1.23 percent and the beta ratio has a value of 0.58.



Long-Term Stock Price Chart Of Whole Foods Market (WFM)
Long-Term Dividend Payment History of Whole Foods Market (WFM)
Long-Term Dividend Yield History of Whole Foods Market (WFM)

Visa (NYSE:V) has a market capitalization of $132.43 billion. The company employs 9,500 people, generates revenue of $11.778 billion and has a net income of $4.980 billion. Visa’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7.639 billion. The EBITDA margin is 64.86 percent (the operating margin is 61.33 percent and the net profit margin 42.28 percent).


Financial Analysis: The total debt represents 0.00 percent of Visa’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 18.21 percent was realized by Visa. Twelve trailing months earnings per share reached a value of $8.78. Last fiscal year, Visa paid $1.32 in the form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.21, the P/S ratio is 11.24 and the P/B ratio is finally 5.05. The dividend yield amounts to 0.75 percent and the beta ratio has a value of 0.75.



Long-Term Stock Price Chart Of Visa (V)
Long-Term Dividend Payment History of Visa (V)
Long-Term Dividend Yield History of Visa (V)

Large Cap Stocks With High Cash And No Debt (Click to enlarge)
Source: US Today Money



No debt with low dividends is better than high yield with big loans. Not to forget, growth is also important. As I have told you earlier, only a growing business is a good business for an investor.

We are sitting on cash and don't know how to spend money, how to invest money or where to invest money. 

This compilation is only a try to find new ideas, new inspirations. I look each day for new targets but mostly I came to the result that they are still too expensive.

What do you think about the names in the stock list? Do you own some of them or do you like to buy some in the near future? Please let me know some of your thoughts by leaving a comment below. Thank you.

Back to the cash stock list and their fundamentals and valuation figures. Only three of them have a P/E ratio of less than 15. Because of the debt-free restriction, we can increase the P/E limit to 20.

Now, 15 companies survived. The highest yielding stock is Coach. Maybe you've heart some of the problems with the decreasing same store sales figures. Mostly reasonable to this is the expansion of new comer, Michael Kors. He is also on the list with a forward P/E of 16.75 but pays no dividend.


Fundamentals and Valuation Figurs of Cash Stocks Without Debt
Source: Long-term-investments.blogspot.com

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Only nine stocks pay a dividend on the list. However, it's not about the dividend ratio but more over the willingness to share profits with the owner of the company fairly and the growth as well.

When we look at the earnings growth for the next five years, estimated by analysts, we can see that AVGO and Kors have the highest figurs (both over 20 percent).

Business Services companies like CTSH and FFIV are following with growth rates over 15 percent.

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*I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

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