In these volatile times many investors are taking solace in dividend stocks. But if the overall market turns, you'd probably prefer not have a deeply indebted company in your portfolio. That's why it's a good idea to dig a little deeper when you're confronted with dividend ideas.
Of course, debt financing isn't always a bad thing. Most companies use some form of debt to finance their day-to-day operations. By doing so, a company can invest in new business opportunities without asking its shareholders for money.
Although there are many exceptions to the rule, it's usually the case that lower-debt companies are less risky than high-debt companies. And when the market starts drifting lower, it's always good to have a couple of low-debt names among your holdings.
We decided to screen for dividend stocks with low debt (measured by debt to equity ratios below 0.3). To refine the list, we only focused on companies that have seen significant insider buying over the last six months.
Insider executives know a lot more about their company's prospects than most other investors, so if they're using their own money to buy the shares of their employers, it's probably a good idea to pay close attention to their bullishness.
Here are our top stock results, sorted by insider buying as a percentage of float. Do you think company insiders are justified in their optimism? (Click here to access free, interactive tools to analyze these ideas.)
List compiled by Alexander Crawford:
1. Center Bancorp
2. Titanium Metals
3. Deer Consumer Products
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.
Kapitall's Rebecca Lipman and Alexander Crawford do not own any of the shares mentioned above. Insider data sourced from Yahoo! Finance, all other data sourced from Finviz.