Here at Dividend.com, we’ve often talked about the side effects of low interest rates on income-seeking investors. But the other side of the equation is worth mentioning as well. Corporate borrowers have feasted on those low rates to fill their balance sheets and in many cases provide income seekers with higher dividends. All of this is fine, of course, as long market conditions are optimal and rates stay long.
But we’ve certainly moved out of an optimal market.
With the Fed raising benchmark rates and more hikes down the road, bloated corporate balance sheets could put a major crimp in many dividend plans. Debt will either need to be rolled over or paid. Both actions take away vital cash that could be going towards dividends. For investors, seeking those stocks with low corporate debt makes a ton of sense going forward.
Use the Dividend Screener to find high-quality value dividend stocks based upon 16 parameters. You can apply your own filters and download this screener result on a searchable spreadsheet to perform custom analysis. Stocks with the highest DARS ratings are Dividend.com’s current recommendations to investors.