Stocks to buy

Investing in dividend stocks with low debt-to-equity ratios in today’s unpredictable market can provide financial stability and growth potential. In this article, we will explore three dividend stocks with low debt-to-equity ratios for income investors. First, we will delve into the recent developments and strategies to understand why these companies are attractive options for investors seeking stability and growth in their portfolios.

All of them offer the benefit of regular dividend payments, which can provide a consistent source of income for investors while having a lower risk profile due to their lower debt levels. In addition, these companies represent diverse operations in essential industries, from food and beverage manufacturing to energy production. Still, they all share a common goal: to deliver sustainable financial performance and growth to their investors.

Dividend Stocks: Kraft Heinz (KHC)

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Kraft Heinz (NASDAQ:KHC) has a total debt/equity ratio of 42.70% and a solid forward annual dividend yield of 4.09%. Additionally, 83% of its float is held by institutions, indicating the concentration of professional money on the stock.

Kraft Heinz, a leading food and beverage manufacturer, is well-positioned to enjoy long-term financial success and growth in market valuation. The company’s recent launches of HEINZ Hot Varieties and the double-ended Ketchup bottle are expected to drive short-term sales and market share gains, catering to consumers’ growing demand for spicy sauces and individualized preferences.

Moreover, Kraft Heinz’s expanded partnership with BEES will likely unlock significant long-term growth opportunities in key Latin American markets, providing access to new retailers and points of sale. With a focus on digital transformation and execution of its emerging markets strategy, the company will deliver sustainable growth, positively impacting financial performance and market valuation.

Furthermore, Kraft Heinz’s disciplined approach to trade investment has contributed to the company’s recent success, using data and science to make promotional decisions that benefit both the company and retailers. As a result, despite negative ROIs in some promotions, the company is being surgical with its investments to drive the best utilization of promotion dollars, generating positive ROIs. Thus, the company tripled the level of ROI returns on promotions compared to three years ago.

Overall, Kraft Heinz’s recent investments in capacity, particularly in critical items for growth in food service, combined with its global partnerships and chef-led model, have been successful in international markets. As a result, the company’s momentum is building, with service levels up and market share increasing in growth platforms such as food service and emerging markets.

Suncor Energy (SU)

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Suncor Energy (NYSE:SU) is a robust performer with impressive returns. With a return on assets of 12.24% and a return on equity of 23.89%, it’s clear that Suncor is making smart investment choices. Add a forward annual dividend yield of 4.80%, and you have a stock perfect for income investors. Moreover, Suncor Energy will continue delivering solid returns with a total debt/equity ratio of 40.72%.

Suncor recently made a strategic move by selling its UK Exploration & Production business, showcasing its commitment to optimizing its asset portfolio and delivering value in the rest of its portfolio. Suncor is well-positioned for long-term financial performance and market valuation growth with a systematic approach to capital allocation and focusing on reducing net debt, sustaining capital, dividends, economic capital, and share buybacks.

Additionally, Suncor’s integrated model and downstream advantage help maximize the value of every barrel, resulting in industry-leading utilization and profitability. The company’s focus on economic investment capital and asset sustenance and maintenance in its 2023 capital budget aims to improve efficiency, flexibility, and resilience, further enhancing its market position.

Meanwhile, the Pathways Alliance aims to achieve net-zero greenhouse gas emissions by reducing annual emissions by 22 metric tons by 2030 through carbon capture, utilization, and storage networks (CCUS) process improvements, energy efficiency, electrification, and fuel switching. In addition, Suncor’s retail network, Petro-Canada, is a valuable asset, and the company invests capital in the most profitable sites, driving value optimization through strategic partnerships.

Suncor’s commitment to operational excellence, environmental sustainability, and strategic optimization of its assets could positively impact its long-term financial performance and growth potential. Lastly, Suncor remains agile and adaptable to ensure continued success as market trends evolve.

Tyson Foods (TSN)

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Tyson Foods (NYSE:TSN) boasts a 12.75% return on equity, a 3.22% forward annual dividend yield, and a total debt/equity ratio of 42.19%. Furthermore, 87% of its float is held by institutions, indicating the focus of smart money on its stock.

Tyson Foods has built a reputation as the most admired company in the food production industry thanks to its unwavering commitment to its employees, communities, and customers. In addition, Tyson’s social responsibility initiatives have endeared them to many, from hunger and disaster relief efforts to grants and educational programs.

Despite weaker chicken, pork, and beef results, Tyson Foods is still uniquely positioned to win in an attractive global protein market, thanks to its market-leading brands across a diverse portfolio and year-over-year sales and volume growth. In addition, its five strategic pillars, which include digital and automation investments, growing with customers to service demand, and restoring competitiveness in the chicken segment, demonstrate its unwavering commitment to driving long-term value creation for its shareholders.

Tyson’s fiscal 2023 financial outlook is positive for the remainder of the year and long-term, despite slower-than-expected first-quarter results due to persistent market factors, operational challenges, and expected seasonality. As a result, the company’s annual sales guidance is between $55 billion and $57 billion, implying 3% to 7% sales growth.

Overall, Tyson Foods remains committed to executing its growth strategy, driving long-term value creation for its shareholders, and delivering sustainable, high-quality growth at a good value. Despite short-term challenges, the company’s solid platform and diverse portfolio position it to see strength-to-strength. With a disciplined capital allocation strategy, it has the potential to invest in organic and inorganic growth while providing additional returns on cash to shareholders. Thus, it is one of the top dividend stocks to buy.

On the date of publication, Yiannis Zourmpanos did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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