About a month ago, Jean-Didier LaPointe of Inovestor Inc published a chart for stocks with high sustainable dividends among US companies. Mr. LaPointe used the program called StockPointer.

The criteria he used was:

A minimum market capitalization of $ 10 billion.  (larger sized companies)

A return on capital of 10% or higher

Positive free cash-flow to capital ratio. The ratio gives a sense of how the company uses the invested capital to generate free cash flows. Positive is good, 5% or above excellent.

A dividend payout of 100% or lower.  (is it sustainable)

A dividend yield of 2% or higher

A positive dividend growth rate for the 1,2,3, and 4 years horizon

Increasing earnings per share over 12 months.

Company              Mkt Cap      R/C   FCF/      Div      1 Yr Div       4 Yr Div   Div

($B)                       Cap %   Yield   Gr Rate        Gr Rat      Payout

Pfizer                     198.01       11.8    3.7          3.85     6.8               7.6           90

Paychex                   19.49       12.9  13.4         3.69     9.5                8.9           80

AbbVie                 112.59         15.5     4.1         3.62     12.2            20.0           61

Philip Morris       178.43        25.5     5.2         3.62     2.0               5.2            92

Invesco                    13.83       10.5     2.4          3.41     3.7               11.1          51

Kellogg                    23.75        19.8      2.5         3.14     4.0                 4.3          95

Intel                         168.55      12.3     5.4          3.04      5.3                4.0           39

P&G                         232.92       10.1     8.3          3.02      1.5                4.2           71

T Rowe Price            19.90       29.6     17.7        2.75     4.7                 11.4        38

Unilever                 170.93        21.4      13.0        2.64    17.1               n/a          57

Reckitt Benckiser   68.34         14.5      12.1        2.03     4.7                 n/a          44

Linking to dividend paying stocks, charts similar to this allows you to narrow your field and choose alternatives. Ideally when you look at the list you will not know every company name or industry it is in. That is good, because we all have biases to how we earn a living or what we work at. The great thing about the lists is you can look at over industries and determine what is their competitive advantage and go from there. There are always alternatives, most of us are bias to one sector or another.

There are more questions than answers, till the next time – to raising questions.