The Safest S&P 500 High-Yield Dividend Stocks

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Apr 25, 2012
High Yield stocks are interesting because they pay a huge amount of cash to shareholders pocket. If a company has yield over five percent and it pay the money for a decade, you will have received your investment amount by more than a half in cash. The only point we should look at is the stability of the dividend payments.


I screened all S&P 500 high yields by the lowest beta ratio. The beta ratio is a statistical ratio which measures the dependence of the stock in relation to the whole capital market. If the ratio is below one, the company has a lower risk than the market. From all 19 S&P 500 high yield stocks are fifteen with a beta ratio of less than one but only six are currently recommended to buy. Thirty percent of the results come from the domestic telecom services industry.


Here are my favorite stocks:



AT&T (T, Financial) has a market capitalization of $188.06 billion. The company employs 256,420 people, generates revenues of $126,723.00 million and has a net income of $4,184.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $27,595.00 million. Because of these figures, the EBITDA margin is 21.78 percent (operating margin 7.27 percent and the net profit margin finally 3.30 percent).


Financial Analysis: The total debt representing 23.95 percent of the company’s assets and the total debt in relation to the equity amounts to 61.36 percent. Due to the financial situation, a return on equity of 3.63 percent was realized. Twelve trailing months earnings per share reached a value of $0.66. Last fiscal year, the company paid $1.73 in form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 47.99, P/S ratio 1.43 and P/B ratio 1.72. Dividend Yield: 5.75 percent. The beta ratio is 0.60.


Reynolds American (RAI, Financial) has a market capitalization of $22.68 billion. The company employs 5,400 people, generates revenues of $8,541.00 million and has a net income of $1,406.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,537.00 million. Because of these figures, the EBITDA margin is 29.70 percent (operating margin 28.09 percent and the net profit margin finally 16.46 percent).


Financial Analysis: The total debt representing 22.54 percent of the company’s assets and the total debt in relation to the equity amounts to 58.60 percent. Due to the financial situation, a return on equity of 22.04 percent was realized. Twelve trailing months earnings per share reached a value of $2.40. Last fiscal year, the company paid $2.15 in form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.51, P/S ratio 2.79 and P/B ratio 3.85. Dividend Yield: 5.37 percent. The beta ratio is 0.56.


Verizon Communications (VZ, Financial) has a market capitalization of $112.22 billion. The company employs 191,800 people, generates revenues of $110,875.00 million and has a net income of $10,198.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $29,376.00 million. Because of these figures, the EBITDA margin is 26.49 percent (operating margin 11.62 percent and the net profit margin finally 9.20 percent).


Financial Analysis: The total debt representing 23.93 percent of the company’s assets and the total debt in relation to the equity amounts to 153.33 percent. Due to the financial situation, a return on equity of 6.45 percent was realized. Twelve trailing months earnings per share reached a value of $0.93. Last fiscal year, the company paid $1.98 in form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 42.43, P/S ratio 0.99 and P/B ratio 3.04. Dividend Yield: 5.19 percent. The beta ratio is 0.55.


Altria Group (MO, Financial) has a market capitalization of $64.55 billion. The company employs 9,900 people, generates revenues of $23,800.00 million and has a net income of $3,393.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $6,321.00 million. Because of these figures, the EBITDA margin is 26.56 percent (operating margin 25.50 percent and the net profit margin finally 14.26 percent).


Financial Analysis: The total debt representing 37.04 percent of the company’s assets and the total debt in relation to the equity amounts to 371.98 percent. Due to the financial situation, a return on equity of 76.13 percent was realized. Twelve trailing months earnings per share reached a value of $1.64. Last fiscal year, the company paid $1.58 in form of dividends to shareholders.


Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.36, P/S ratio 2.72 and P/B ratio 17.64. Dividend Yield: 5.16 percent. The beta ratio is 0.40.


Take a closer look at the full table of the safest S&P 500 high yield stocks. The average price to earnings ratio (P/E ratio) amounts to 27.15 and forward P/E ratio is 15.17. The dividend yield has a value of 6.00 percent. Price to book ratio is 2.85 and price to sales ratio 1.83. The operating margin amounts to 17.35 percent. The average stock has a beta ratio of 0.60.


Related stock ticker symbols:

PBCT, PPL, MO, POM, ETR, VZ, EXC, RAI, AEE, T, FTR, CTL, WIN, TEG, HCN


Selected Articles:

· The Cheapest High Yield Stocks On The S&P 500

· The Safest Dividend Aristocrats

· The Best Yielding Stocks From The S&P 500

· Best Yielding Low Beta Dividend Challengers