Dividends Without Debt

An 18% dividend yield is usually a warning sign. It might mean investors have little confidence in a company's

ability to preserve its share price and keep making payments. Often, debt adds to the anxiety. Newspaper publisher pays 18%, but has sinking sales and profits and carries long-term debt of nearly double its stock-market value. pays 21%. Its business of borrowing cheap-to-hold government-sponsored mortgage debt isn't as risky as it sounds, unless financing dries up -- something investors are clearly worried about.

yields 18% and owes nothing. It, too, has warts. But maybe the stock has gotten cheap enough to make up for them.

Ontario-based Biovail, Canada's largest traded drug company, has focused since the mid-1990s on making alternative versions of existing drugs. But the thinning development pipelines of big drug makers have given Biovail less to work with.

Its biggest hit, Wellbutrin XL, has faced generic competition since late 2006. Ultram ER, a once-daily pain pill released in 2006, hasn't caught on as quickly as hoped. Demand for Zovirax, a herpes cream, and Cardizem LA, a pill for high blood pressure, is cooling, too. Companywide sales are on pace to shrink to $748 million this year and $695 million next year. Shares, which multiplied in price from 50 cents in 1994 to more than $50 in 2001, have since fallen below $9.

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