The payout ratio measures the percentage of a company’s earnings paid to shareholders as dividends. High payout ratios can create attractive yields but often limit the ability to raise dividends and increase the risk of cuts when earnings slow.
Low payout ratios give companies more flexibility to reinvest in growth, strengthen their balance sheet, and steadily increase dividends over time. These stocks may not have the highest yields today, but their capacity for dividend growth and share price gains can make them stronger long-term investments.
In this article, we look at 10 companies with low payout ratios, solid financials, and durable business models that can support rising dividends and long-term value creation.
| Company Name (Ticker) | P/E Ratio | Analyst Upside |
| Robert Half (RHI) | 20 | 26% |
| Teleflex (TFX) | 8 | 17% |
| Lennox International (LII) | 23 | 12% |
| Air Products and Chemicals (APD) | 23 | 11% |
| Watsco (WSO) | 30 | 11% |
| Landstar System (LSTR) | 24 | 8% |
| Genuine Parts Company (GPC) | 17 | 3% |
| W. R. Berkley (WRB) | 16 | 3% |
| NVR (NVR) | 18 | 2% |
| Fastenal Company (FAST) | 41 | -9% |
Robert Half (RHI)
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Robert Half (RHI) is one of the world’s largest staffing and consulting firms, specializing in professional placements across finance, accounting, technology, and administrative roles. Its business benefits from deep client relationships and a global network of offices.
What makes Robert Half particularly interesting now is its positioning in the economic cycle. If the U.S. economy avoids a prolonged downturn, hiring demand could reaccelerate, boosting revenue and earnings. The company’s strong balance sheet and disciplined cost management give it the flexibility to weather slow periods and capitalize on rebounds.
With analysts projecting roughly 26% upside from current levels and a history of reliable dividend growth, Robert Half offers a total-return profile that blends a safe yield with room for meaningful capital appreciation.
Robert Half has increased its dividend for 22 consecutive years and currently yields around 6.4%.
Teleflex Incorporated (TFX)
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Teleflex (TFX) develops and supplies single-use medical devices for critical care and surgical applications, with a product portfolio that spans vascular access, anesthesia, and interventional urology. Its devices are used in hospitals worldwide, creating recurring demand.
The investment appeal here lies in Teleflex’s combination of defensive industry positioning and underutilized dividend capacity. Management has historically prioritized growth investments over income distribution, but that leaves ample room for payout expansion without compromising product innovation.
Trading at a discount to historical valuation multiples and with analyst expectations for mid-teens upside, Teleflex could deliver a rare trifecta for long-term investors with dependable earnings, dividend growth potential, and capital appreciation.
Lennox International (LII)
Lennox International (LII) is a leader in heating, ventilation, air conditioning, and refrigeration (HVACR) systems, serving both residential and commercial markets. Its premium brand and dealer network give it pricing power and repeat business opportunities.
For investors, Lennox offers exposure to a durable industry with structural tailwinds. The company’s leadership in premium, energy-efficient systems positions it to capture share as both homeowners and businesses seek to cut energy costs.
Analysts see a double-digit upside, and given its modest payout ratio, dividend growth should remain strong even in periods of slower top-line expansion.
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
