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If you want to analyze a company’s sales trends, one idea is to consider their growth in inventory over time. Comparing this to growth in revenue could show some interesting results.

We ran a screen on dividend stocks with high liquidity (measured by current ratios above 3) for those with positive trends in inventory: growth in quarterly revenue outpacing growth in quarterly inventory year-over-year. We also screened for companies with quarterly inventory decreasing as a percent of current assets.

To understand why these trends are positive, think of why the opposite trends would be negative. If revenue were growing slower than inventory, it may indicate that the company is having trouble selling its inventory – although this could just indicate inventory building or a change in sales policies.

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. To access a complete analysis of this list's recent performance, click here.


(Click to enlarge)

Do you think these companies have strong sales trends? Use this list as a starting point for your own analysis.

List sorted by difference between revenue and growth.

1. Compass Minerals International Inc. (NYSE:CMP): Produces and markets inorganic mineral products primarily in North America and the United Kingdom. Market cap of $2.52B. Dividend yield at 2.35%, payout ratio at 35.54%. Current ratio at 3.62. MRQ revenue has increased 30.17% ($229.1M vs. $176M y/y) while MRQ inventory has decreased 23.38% ($185.8M vs. $242.5M y/y). Inventory/current assets has decreased from 55.90% to 40.53%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock has had a couple of great days, gaining 7.43% over the last week.

2. Haynes International Inc. (NASDAQ:HAYN): Develops, manufactures, markets, and distributes high-performance nickel-and cobalt-based alloys in sheet, coil, and plate forms for use in the various industries worldwide. Market cap of $731.51M. Dividend yield at 1.47%, payout ratio at 31.67%. Current ratio at 4.44. MRQ revenue has increased 47.47% ($154.31M vs. $104.64M y/y) while MRQ inventory has increased 7.88% ($250.05M vs. $231.78M y/y). Inventory/current assets has decreased from 62.37% to 60.77%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock is a short squeeze candidate, with a short float at 5.27% (equivalent to 5.28 days of average volume). The stock has gained 51.07% over the last year.

3. Bristow Group, Inc. (NYSE:BRS): Provides helicopter services to the offshore energy industry primarily in Europe, West Africa, North America, Australia, and internationally. Market cap of $1.67B. Dividend yield at 1.30%, payout ratio at 11.24%. Current ratio at 3.61. MRQ revenue has increased 5.90% ($330.99M vs. $312.56M y/y) while MRQ inventory has decreased 18.52% ($157.27M vs. $193.02M y/y). Inventory/current assets has decreased from 32.47% to 25.73%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock is a short squeeze candidate, with a short float at 6.58% (equivalent to 7.64 days of average volume). The stock has gained 3.51% over the last year.

4. 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 $1.92B. Dividend yield at 2.05%, payout ratio at 34.58%. Current ratio at 4.26. MRQ revenue has increased 3.57% ($274.52M vs. $265.05M y/y) while MRQ inventory has decreased 16.01% ($110.25M vs. $131.26M y/y). Inventory/current assets has decreased from 40.09% to 32.08%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock is a short squeeze candidate, with a short float at 13.55% (equivalent to 20.91 days of average volume). The stock has had a couple of great days, gaining 6.73% over the last week.

5. Broadcom Corp. (NASDAQ:BRCM): Designs and develops semiconductors for wired and wireless communications. Market cap of $16.36B. Dividend yield at 1.19%, payout ratio at 19.99%. Current ratio at 3.65. MRQ revenue has increased 8.36% ($1,957M vs. $1,806M y/y) while MRQ inventory has decreased 8.20% ($491M vs. $534.86M y/y). Inventory/current assets has decreased from 13.95% to 10.93%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock has performed poorly over the last month, losing 15.92%.

6. Sun Hydraulics Corp. (NASDAQ:SNHY): Designs and manufactures screw-in hydraulic cartridge valves and manifolds, components of fluid-power systems that control force, speed, and motion. Market cap of $645.35M. Dividend yield at 1.43%, payout ratio at 47.73%. Current ratio at 7.10. MRQ revenue has increased 39.32% ($53.04M vs. $38.07M y/y) while MRQ inventory has increased 23.36% ($12.04M vs. $9.76M y/y). Inventory/current assets has decreased from 12.40% to 11.85%, comparing 3 months ending 2011-10-01 to 3 months ending 2010-10-02. This is a risky stock that is significantly more volatile than the overall market (beta = 2.15). The stock has performed poorly over the last month, losing 12.52%.

7. St. Jude Medical Inc. (NYSE:STJ): Develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide. Market cap of $12.26B. Dividend yield at 2.19%, payout ratio at 22.57%. Current ratio at 3.44. MRQ revenue has increased 11.51% ($1,382.56M vs. $1,239.9M y/y) while MRQ inventory has decreased 4.34% ($658.76M vs. $688.66M y/y). Inventory/current assets has decreased from 21.40% to 19.40%, comparing 13 weeks ending 2011-10-01 to 13 weeks ending 2010-10-02. The stock has had a couple of great days, gaining 8.5% over the last week.

8. RPC Inc. (NYSE:RES): Provides a range of oilfield services and equipment to the oil and gas companies primarily in the United States. Market cap of $2.90B. Dividend yield at 2.05%, payout ratio at 14.20%. Current ratio at 3.05. MRQ revenue has increased 66.19% ($502.24M vs. $302.2M y/y) while MRQ inventory has increased 50.49% ($93.14M vs. $61.89M y/y). Inventory/current assets has decreased from 17.35% to 16.48%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock has lost 1.56% over the last year.

9. Steel Dynamics Inc. (NASDAQ:STLD): Engages in the manufacture and sale of steel products in the United States. Market cap of $2.88B. Dividend yield at 3.03%, payout ratio at 32.02%. Current ratio at 3.48. MRQ revenue has increased 28.99% ($2,043.45M vs. $1,584.16M y/y) while MRQ inventory has increased 14.93% ($1,158.85M vs. $1,008.31M y/y). Inventory/current assets has decreased from 50.16% to 46.42%, comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30. The stock has had a couple of great days, gaining 8.84% over the last week.

10. Foot Locker, Inc. (NYSE:FL): Operates as a retailer of athletic footwear and apparel. Market cap of $3.61B. Dividend yield at 2.80%, payout ratio at 38.98%. Current ratio at 3.63. MRQ revenue has increased 16.33% ($1,275M vs. $1,096M y/y) while MRQ inventory has increased 4.10% ($1,269M vs. $1,219M y/y). Inventory/current assets has decreased from 64.19% to 59.33%, comparing 13 weeks ending 2011-07-30 to 13 weeks ending 2010-07-31. The stock has had a couple of great days, gaining 7.72% over the last week.

11. Franklin Electric Co. Inc. (NASDAQ:FELE): Engages in the design, manufacture, and distribution of groundwater and fuel pumping systems. Market cap of $1.09B. Dividend yield at 1.15%, payout ratio at 20.67%. Current ratio at 3.18. MRQ revenue has increased 19.10% ($224.39M vs. $188.41M y/y) while MRQ inventory has increased 10.09% ($154.09M vs. $139.97M y/y). Inventory/current assets has decreased from 37.65% to 37.59%, comparing 13 weeks ending 2011-10-01 to 13 weeks ending 2010-10-02. The stock is a short squeeze candidate, with a short float at 6.22% (equivalent to 7.2 days of average volume). The stock has had a couple of great days, gaining 6.61% over the last week.

12. Cascade Corp. (NYSE:CASC): Manufactures loading devices and replacement parts primarily for the lift-truck and construction industry. Market cap of $482.09M. Dividend yield at 2.30%, payout ratio at 36.04%. Current ratio at 4.04. MRQ revenue has increased 38.78% ($135.64M vs. $97.74M y/y) while MRQ inventory has increased 30.36% ($82.1M vs. $62.98M y/y). Inventory/current assets has decreased from 35.85% to 35.45%, comparing 3 months ending 2011-07-31 to 3 months ending 2010-07-31. The stock has had a couple of great days, gaining 8.02% over the last week.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 12 Highly Liquid Dividend Stocks With Encouraging Inventory Trends