In the last year, it's felt like there are two kinds of
dividend stocks out there: those that have cut their
dividends and
those that are about to.
And who can blame them?
In a credit crisis, companies with large dividend yields
are quickly reminded that they are giving away their most
readily available form of capital. And when companies' shares
are priced as if they won't survive the credit crisis,
shareholders sometimes see dividend cuts as positive
developments. After all, wouldn't you rather own shares in a
viable company that pays no dividend than in a bankrupt
company that declares high dividends all the way down into
oblivion?
As a result, we're on pace for the worst dividend cuts
since the 1930s, and earlier this year the stock prices of
companies including
JPMorgan Chase ,
CBS (NYSE: CBS), and
General Electric actually
roseimmediately after the news of dividend cuts.
That's all well and good, but what if, like me, you're
old-fashioned and want to find some companies that can
actually sustain their dividends?
Here's how to find them
We need to identify companies that:
Here are a few that meet those criteria:
Company
Recent Dividend Yield
Payout Ratio
Interest Coverage
ADP
(NYSE: ADP)
3.5%
47%
57x
PetroChina
(NYSE: PTR)
3.5%
47%
42x
Snap-on
(NYSE: SNA)
3.3%
37%
9.5x
Clorox
(NYSE: CLX)
3.4%
48%
6x
General Mills
(NYSE: GIS) Continued... |