The beautiful thing about having no debt is that you do not owe any money to anyone. For a publicly-traded company, it also means much less worry about interest rates: refinancing when old bonds mature is not a problem and the dividends paid to investors are more secure than those of companies loaded with debt.
That is why it is probably worth time to seek out and examine those stocks with zero debt on the books – or with almost zero. A screen for such opportunities that includes “low price-earnings ratio” and “dividends being paid” uncovers at least four names.
AllianceBernstein
The first is AllianceBernstein Holding LP (AB, Financial), a big financial services company with a market capitalization of $3.70 billion. From global headquarters in Nashville, Tennessee, the company specializes in asset management and research. The past five years' earnings show growth of 1.90% and this year’s earnings are down by 30.50%.
Analysts seem to think that next year and beyond will be better. In early September, Bank of America Securities upgraded the stock from neutral to buy with a price target of $36 to $47. Credit Suisse in February had upgraded it from neutral to outperform with a price target of $32 to $43.50.
The stock trades with a price-earnings ratio of 14 and at 1.77 times book value. AllianceBernstein pays a dividend of 8.17%.
CVB Financial
CVB Financial Corp. (CVBF, Financial) comes under the regional banking designation. The market capitalization for the Ontario, California-based company is $2.40 billion. The stock is trading at 1.20 times its book value with a price-earnings ratio of 9.87 and a price-to-free cash flow ratio of 7.96. The bank has no debt.
This year’s earnings are up by 7.20% and up over the past five years by 9.40%. The Nasdaq-traded stock is actively traded with an average daily volume of 1.26 million shares. In May, analysts at Janney upgraded it from a neutral to a buy rating. CVB Financial offers a 4.61% dividend.
Immersion
Immersion Corp. (IMMR, Financial) is a software application maker headquartered in Aventura, Florida. The company has a market capitalization of $222 million, trades with a price-earnings ratio of 5.25 and sells for 1.31 times book. Price-sales comes in at 5.97 and price-to-free cash flow at 7.33.
Over the past five years, the company shows earnings growth of 23.10% and this year’s is up by 132.90%. The stock is relatively lightly traded on the Nasdaq with an average daily volume of 461,000 shares. With no debt on the books, Immersion pays a dividend of 1.76%.
Joyy
Joyy Inc. (YY, Financial) is an internet communications company based in Singapore. The maker of social media platforms Bigo Live, Likee and Hago, the Nasdaq-traded company has a market capitalization of $2.25 billion. The stock trades at a 45% discount to its book value with a price-earnings ratio of 8.68.
Earnings this year are up by 190.60% and down over the past five years by 48.70%. The company has zero long-term debt and a debt-to-equity ratio as a whole of 0.09.
It is lightly traded with average daily volume of 481,000 shares. Joyy offers investors a 2.12% dividend.
This is not investment advice. It’s for educational purposes only. Stats are courtesy of FinViz.com.
