When considering dividend stocks to add to their portfolios, investors often look for reassurance that they'll receive the payouts they're promised. The most common way of determining if a company can afford to pay its dividends is to compare them to earnings, making certain that the latter can cover the former. The problem is, it's fairly easy for management to manipulate company earnings.

Cold hard cash, on the other hand, doesn't lie. So it's not a bad idea to take a look at a company's cash holdings as well.

For this list, we found high dividend yield stocks with sufficient cash to cover at least two quarters of the past year's average quarterly operating expenses. To do so, we calculated the average quarterly operating expense over the past four quarters and compared it with current cash holdings for each firm.

These companies have more than twice the amount of cash needed for one quarter's operating expenses, which means they should (at least theoretically) be able to cover their high dividend payments. But of course, there are no guarantees -- be sure to use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)

Here's a list of six high yield dividend stocks with enough cash to cover two quarters of operating expenses.

Company

Industry

Dividend Yield

Average Operating Expenses vs. Cash Holdings (in Millions)

Cash / OperatingExpense Ratio

Portugal Telecom (NYSE: PT)

Wireless Communications

6.13%

Average quarterly operating expenses at $1392.62M vs. MRQ cash holdings at $6247.25M

Ratio at 4.49, i.e., the company has enough cash to cover about 4.49 quarters of average operating expenses

Southern Copper (Nasdaq: SCCO)

Copper

4.58%

Average quarterly operating expenses at $636.33M vs. MRQ cash holdings at $2268.89M

Ratio at 3.57, i.e., the company has enough cash to cover about 3.57 quarters of average operating expenses

USA Mobility (Nasdaq: USMO)

Wireless Communications

7.36%

Average quarterly operating expenses at $44.02M vs. MRQ cash holdings at $129.22M

Ratio at 2.94, i.e., the company has enough cash to cover about 2.94 quarters of average operating expenses

Tsakos Energy Navigation Ltd. (NYSE: TNP)

Shipping

6.40%

Average quarterly operating expenses at $86.95M vs. MRQ cash holdings at $252.51M

Ratio at 2.9, i.e., the company has enough cash to cover about 2.9 quarters of average operating expenses

Turkcell Iletisim Hizmetleri (NYSE: TKC)

Wireless Communications

4.29%

Average quarterly operating expenses at $1207.91M vs. MRQ cash holdings at $3310.36M

Ratio at 2.74, i.e., the company has enough cash to cover about 2.74 quarters of average operating expenses

Bristol-Myers Squibb (NYSE: BMY)

Drug Manufacturer

5.00%

Average quarterly operating expenses at $3353.25M vs. MRQ cash holdings at $7301.M

Ratio at 2.18, i.e., the company has enough cash to cover about 2.18 quarters of average operating expenses

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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