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High-Yield Debt-Free Stocks - 8531 views
Debt can have its advantages, such as leverage, but can also be a burden. Many successful companies are debt-free, such as Apple (AAPL), or have very low debt relative to cash, such as Amazon (AMZN). If you combine the debt-free feature with a high yield, you may have a recipe for a successful investment.
There are over 10 stocks on the latest High Yield No Debt Stock List at WallStreetNewsNetwork.com, which have yields ranging from 2% to 7.7% and are all debt-free.
An example is Paychex (PAYX), a provider of payroll, human resource and benefits outsourcing solutions. Its market is primarily small and medium-size businesses. This debt-free company pays a yield of 4.5% and has been paying quarterly dividends since 1994. It trades at 21 times earnings. Earnings for the latest quarter were up 6.7%, on a 3.6% increase in revenues. In August, Deutsche Bank upgraded the stock from a sell to a hold.
Another example is Erie Indemnity (ERIE), an insurance company based in Erie, Pa., which also has no debt. The stock sports a yield of 3.2%, and a P/E ratio of 22. Net income per diluted share for the latest quarter was up 36% year over year, with gross margins rising 21.1%.
To see a free list of many other companies that have no debt and pay high yields, five of which pay more than 6%, visit WallStreetNewsNetwork.com. The list, which is in an Excel format, can be downloaded, sorted and updated.
At the time of publication, author was long AAPL and AMZN.
Fred Fuld III, the publisher of stock and bond investing blog Stockerblog and founder of WallStreetNewsNetwork, has been in the financial services industry for over 20 years, working as an investment advisor, options market maker at the Pacific Stock Exchange, vice president of a San Francisco money management firm, university faculty member and wholesaler for the New Alternatives Fund (the first environmentally conscious mutual fund). He is the author of the books Investing in Brazil Stocks and The Green Light on Green Stocks.