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10 Dow Dividend Stocks Fail 'Acid Test'

28. Alcoa (AA)

Alcoa is engaged in the production and management of primary aluminum, fabricated aluminum and alumina. (more >>)

  • Liability Adjusted Cash Flow Yield: 0.7%
  • Dividend Yield: 1.07%
  • Coverage Ratio: 0.65
  • Dividend Acid Test: FAIL
  • 5-Year Tax Rate: 28.4%

27. Caterpillar (CAT)

Caterpillar provides construction and mining equipment; diesel and natural gas engines and industrial gas turbines. (more >>)

  • Liability Adjusted Cash Flow Yield: 1.9%
  • Dividend Yield: 2.3%
  • Coverage Ratio: 0.83
  • Dividend Acid Test: FAIL
  • 5-Year Tax Rate: 25%

26. Wal-Mart (WMT)

Wal-Mart operates Wal-Mart discount stores, supercenters, Neighborhood Markets and Sam's Club locations in the U.S. (more >>)

  • Liability Adjusted Cash Flow Yield: 2%
  • Dividend Yield: 2.26%
  • Coverage Ratio: 0.88
  • Dividend Acid Test: FAIL
  • 5-Year Tax Rate: 33.5%

Note: Wal-Mart passes when using five-year average cash flow data, see here >>


25. JPMorgan Chase (JPM)

JPMorgan Chase is a global financial services firm with banking institutions in the U.S. and operations worldwide. (more >>)

  • Liability Adjusted Cash Flow Yield: 2.3%
  • Dividend Yield: 0.49%
  • Coverage Ratio: 4.69
  • Dividend Acid Test: PASS
  • 5-Year Tax Rate: 28.3%

24. Bank of America (BAC)

Bank of America is a bank holding and a financial holding company, which through its subsidiaries, provides banking and nonbanking financial services and products throughout the U.S. and in select international markets. (more >>)

  • Liability Adjusted Cash Flow Yield: 2.4%
  • Dividend Yield: 0.29%
  • Coverage Ratio: 8.28
  • Dividend Acid Test: PASS
  • 5-Year Tax Rate: 27%

23. McDonald's (MCD)

McDonald's franchises and operates McDonald's restaurants in the food service industry. The company and its franchisees purchase food, packaging, equipment and other goods from numerous independent suppliers. (more >>)

  • Liability Adjusted Cash Flow Yield: 2.5%
  • Dividend Yield: 2.91%
  • Coverage Ratio: 0.86
  • Dividend Acid Test: FAIL
  • 5-Year Tax Rate: 30.7%

Note: McDonald's passes when using five-year average cash flow data, see here >>


22. Kraft (KFT)

Kraft, through its subsidiaries, manufactures and markets packaged food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products. (more >>)

  • Liability Adjusted Cash Flow Yield: 2.7%
  • Dividend Yield: 3.67%
  • Coverage Ratio: 0.74
  • Dividend Acid Test: FAIL
  • 5-Year Tax Rate: 28.2%

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