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Accounts receivable is a big part of revenue for many companies, but it is also a potential source of problems.

Receivables represent money earned but not yet collected, so when receivables become a larger part of the revenue reported by a company, it indicates lower quality revenues. This is because there is no guarantee that the money will be paid back in full.

We ran a screen on dividend stocks with strong operating cash flow coverage of their dividend. We screened these stocks for those that have seen positive trends in their accounts receivable, with increases in quarterly revenue year-over-year outpacing changes in quarterly accounts receivable. We also screened for companies that have seen a decrease in accounts receivable as a percent of current assets year-over-year.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month.

(Click chart for more detail)



Do you think these stocks pay reliable dividends? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. STMicroelectronics NV (NYSE:STM): Engages in the design, development, manufacture, and marketing of a range of semiconductor integrated circuits and discrete devices. Market cap of $6.03B. Dividend yield at 6.06%, payout ratio at 17.54%. TTM dividend per share at $0.20 vs. TTM total operating cash flow per share at $1.67. MRQ revenue has increased 1.42% ($2,567M vs. $2,531M y/y) while MRQ accounts receivable has decreased 5.53% ($2,051M vs. $2,171M y/y). Accounts receivable/current assets has decreased from 31.85% to 29.55%, comparing 3 months ending 2011-07-02 to 3 months ending 2010-06-26. The stock has lost 11.73% over the last year.

2. Marathon Oil Corporation (NYSE:MRO): Operates as an international energy company with operations in the United States, Canada, Africa, the Middle East, and Europe. Market cap of $16.59B. Dividend yield at 4.32%, payout ratio at 28.57%. TTM dividend per share at $1.00 vs. TTM total operating cash flow per share at $11.42. MRQ revenue has increased 33.14% ($3,865M vs. $2,903M y/y) while MRQ accounts receivable has decreased 63.35% ($1,843M vs. $5,028M y/y). Accounts receivable/current assets has decreased from 44.65% to 25.20%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. Might be undervalued at current levels, with a PEG ratio at 0.94, and P/FCF ratio at 4.76. It's been a rough couple of days for the stock, losing 7.71% over the last week.

3. ConocoPhillips (NYSE:COP): Operates as an integrated energy company worldwide. Market cap of $88.05B. Dividend yield at 4.13%, payout ratio at 30.57%. TTM dividend per share at $2.42 vs. TTM total operating cash flow per share at $12.90. MRQ revenue has increased 33.58% ($66,961M vs. $50,127M y/y) while MRQ accounts receivable has increased 27.34% ($16,805M vs. $13,197M y/y). Accounts receivable/current assets has decreased from 49.49% to 48.46%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. The stock has gained 18.15% over the last year.

4. National Healthcare Corp. (NYSEMKT:NHC): Operates and manages long-term health care centers, and associated assisted living and independent living centers in the United States. Market cap of $458.05M. Dividend yield at 3.63%, payout ratio at 28.90%. TTM dividend per share at $1.14 vs. TTM total operating cash flow per share at $4.88. MRQ revenue has increased 7.83% ($190.78M vs. $176.92M y/y) while MRQ accounts receivable has decreased 5.63% ($66.08M vs. $70.02M y/y). Accounts receivable/current assets has decreased from 23.32% to 20.21%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. The stock is a short squeeze candidate, with a short float at 5.93% (equivalent to 12.69 days of average volume). It's been a rough couple of days for the stock, losing 9.36% over the last week.

5. Packaging Corp. of America (NYSE:PKG):
Produces and sells containerboard and corrugated products in the United States. Market cap of $2.50B. Dividend yield at 3.26%, payout ratio at 31.76%. TTM dividend per share at $0.70 vs. TTM total operating cash flow per share at $3.99. MRQ revenue has increased 8.13% ($665.48M vs. $615.46M y/y) while MRQ accounts receivable has decreased 21.68% ($334.84M vs. $427.51M y/y). Accounts receivable/current assets has decreased from 49.66% to 45.11%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. It's been a rough couple of days for the stock, losing 7.75% over the last week.

6. Applied Materials Inc. (NASDAQ:AMAT): Provides manufacturing equipment, services, and software to the semiconductor, flat panel display, solar photovoltaic (PV), and related industries worldwide. Market cap of $13.68B. Dividend yield at 3.09%, payout ratio at 20.43%. TTM dividend per share at $0.30 vs. TTM total operating cash flow per share at $1.69. MRQ revenue has increased 10.69% ($2,787M vs. $2,517.79M y/y) while MRQ accounts receivable has increased 5.26% ($1,812M vs. $1,721.5M y/y). Accounts receivable/current assets has decreased from 26.28% to 17.64%, comparing 13 weeks ending 2011-07-31 to 13 weeks ending 2010-08-01. Might be undervalued at current levels, with a PEG ratio at 0.73, and P/FCF ratio at 8.06. It's been a rough couple of days for the stock, losing 7.57% over the last week.

7. Knoll Inc. (NYSE:KNL): Engages in the design, manufacture, and sale of workplace furnishings, textiles, and fine leathers for the workplace and home. Market cap of $679.52M. Dividend yield at 2.82%, payout ratio at 29.02%. TTM dividend per share at $0.24 vs. TTM total operating cash flow per share at $1.53. MRQ revenue has increased 24.12% ($238.65M vs. $192.28M y/y) while MRQ accounts receivable has increased 13.32% ($124.14M vs. $109.55M y/y). Accounts receivable/current assets has decreased from 49.84% to 49.28%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. The stock has lost 5.39% over the last year.

8. MKS Instruments Inc. (NASDAQ:MKSI): Provides instruments, subsystems, and process control solutions that measure, control, power, monitor, and analyze parameters of manufacturing processes worldwide. Market cap of $1.14B. Dividend yield at 2.78%, payout ratio at 10.65%. TTM dividend per share at $0.30 vs. TTM total operating cash flow per share at $3.53. MRQ revenue has increased 1.74% ($224.49M vs. $220.65M y/y) while MRQ accounts receivable has decreased 7.63% ($150.98M vs. $163.46M y/y). Accounts receivable/current assets has decreased from 24.56% to 17.77%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. It's been a rough couple of days for the stock, losing 8.33% over the last week.

9. PH Glatfelter Co. (NYSE:GLT): Manufactures and sells specialty papers and fiber-based engineered materials in the United States and internationally. Market cap of $615.39M. Dividend yield at 2.68%, payout ratio at 22.18%. TTM dividend per share at $0.36 vs. TTM total operating cash flow per share at $2.88. MRQ revenue has increased 9.69% ($400.05M vs. $364.7M y/y) while MRQ accounts receivable has increased 4.92% ($162.27M vs. $154.66M y/y). Accounts receivable/current assets has decreased from 35.30% to 29.66%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. Might be undervalued at current levels, with a PEG ratio at 0.92, and P/FCF ratio at 9.06. The stock is a short squeeze candidate, with a short float at 8.71% (equivalent to 13.35 days of average volume). The stock has gained 17.76% over the last year.

10. Eastman Chemical Co. (NYSE:EMN): Engages in the manufacture and sale of chemicals, plastics, and fibers in the United States and internationally. Market cap of $4.97B. Dividend yield at 2.66%, payout ratio at 23.12%. TTM dividend per share at $1.85 vs. TTM total operating cash flow per share at $8.80. MRQ revenue has increased 25.50% ($1,885M vs. $1,502M y/y) while MRQ accounts receivable has increased 9.27% ($884M vs. $809M y/y). Accounts receivable/current assets has decreased from 42.38% to 35.25%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. It's been a rough couple of days for the stock, losing 5.89% over the last week.

11. Expeditors International of Washington Inc. (NASDAQ:EXPD): Provides logistics services in the United States and internationally. Market cap of $8.76B. Dividend yield at 2.43%, payout ratio at 25.21%. TTM dividend per share at $0.45 vs. TTM total operating cash flow per share at $2.33. MRQ revenue has increased 4.26% ($1,581.37M vs. $1,516.77M y/y) while MRQ accounts receivable has increased 1.13% ($1,028.02M vs. $1,016.58M y/y). Accounts receivable/current assets has decreased from 50.27% to 44.44%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. It's been a rough couple of days for the stock, losing 6.85% over the last week.

12. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational, and business information markets worldwide. Market cap of $13.02B. Dividend yield at 2.32%, payout ratio at 34.22%. TTM dividend per share at $0.97 vs. TTM total operating cash flow per share at $4.64. MRQ revenue has increased 7.24% ($1,580.8M vs. $1,474.06M y/y) while MRQ accounts receivable has increased 2.74% ($1,021.3M vs. $994.04M y/y). Accounts receivable/current assets has decreased from 34.18% to 32.67%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. The stock has gained 34.96% over the last year.

13. Caterpillar Inc. (NYSE:CAT): Manufactures and sells construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives worldwide. Market cap of $49.65B. Dividend yield at 2.30%, payout ratio at 27.95%. TTM dividend per share at $1.78 vs. TTM total operating cash flow per share at $9.67. MRQ revenue has increased 36.71% ($14,230M vs. $10,409M y/y) while MRQ accounts receivable has increased 18.01% ($17,033M vs. $14,434M y/y). Accounts receivable/current assets has decreased from 52.73% to 41.79%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. It's been a rough couple of days for the stock, losing 9.16% over the last week.

14. Texas Roadhouse Inc. (NASDAQ:TXRH): Operates a full-service, casual dining restaurant chain in the United States. Market cap of $1.02B. Dividend yield at 2.24%, payout ratio at 19.03%. TTM dividend per share at $0.16 vs. TTM total operating cash flow per share at $1.75. MRQ revenue has increased 9.57% ($279.57M vs. $255.16M y/y) while MRQ accounts receivable has decreased 0.64% ($12.35M vs. $12.43M y/y). Accounts receivable/current assets has decreased from 14.13% to 11.37%, comparing 13 weeks ending 2011-06-28 to 13 weeks ending 2010-06-29. The stock is a short squeeze candidate, with a short float at 11.64% (equivalent to 7.25 days of average volume). The stock has had a good month, gaining 10.22%.

15. Lancaster Colony Corporation (NASDAQ:LANC): Engages in the manufacture and marketing of consumer products focusing primarily on specialty foods for the retail and foodservice markets in the United States. Market cap of $1.67B. Dividend yield at 2.17%, payout ratio at 33.52%. TTM dividend per share at $1.29 vs. TTM total operating cash flow per share at $5.31. MRQ revenue has increased 3.24% ($256.03M vs. $248M y/y) while MRQ accounts receivable has decreased 5.92% ($63.76M vs. $67.77M y/y). Accounts receivable/current assets has decreased from 21.35% to 19.14%, comparing 3 months ending 2011-06-30 to 3 months ending 2010-06-30. The stock is a short squeeze candidate, with a short float at 14.79% (equivalent to 23.83 days of average volume). The stock has gained 35.03% over the last year.

16. Motorola Solutions, Inc. (NYSE:MSI): Provides business and mission critical communication products and services for enterprise and government customers worldwide. Market cap of $14.34B. Dividend yield at 2.11%, payout ratio at 11.85%. TTM dividend per share at $0.22 vs. TTM total operating cash flow per share at $4.69. MRQ revenue has increased 6.15% ($2,055M vs. $1,936M y/y) while MRQ accounts receivable has decreased 56.15% ($1,651M vs. $3,765M y/y). Accounts receivable/current assets has decreased from 23.51% to 16.08%, comparing 3 months ending 2011-07-02 to 3 months ending 2010-07-03. It's been a rough couple of days for the stock, losing 6.05% over the last week.

*Dividend per share and operating cash flow per share data sourced from Screener.co, accounting data sourced from Google Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 16 Dividend Stocks With Strong Cash Coverage And Strong Receivable Trends