Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

One of the biggest considerations when choosing among dividend stocks is company liquidity. If a company has strong sources of liquidity such as cash and marketable securities, they can continue paying their dividend yield even if there’s a temporary dip in profitability.

Companies with lower liquidity are thought to pay less reliable dividends.

We ran a screen on “dividend champions,” companies that have consistently raised their dividend over the last 25 years. We screened these stocks for those with increasing liquidity and with increasing current ratios (current assets/current liabilities) over the last four years.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.

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

List sorted by dividend yield.

1. PPG Industries Inc. (NYSE:PPG): Manufactures and supplies protective and decorative coatings. Market cap of $12.22B. Dividend yield at 2.88%, payout ratio at 33.03%. Current Ratio increased from 1.5 to 1.51 during the first time interval (12 months ending 2008-12-31 vs. 12 months ending 2007-12-31). For the second time interval, the Current Ratio increased from 1.51 to 1.67 (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). And for the final time interval, the Current Ratio increased from 1.67 to 1.95 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). The stock has lost 1.36% over the last year.

2. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational and business information markets worldwide. Market cap of $12.40B. Dividend yield at 2.37%, payout ratio at 34.87%. Current Ratio increased from 0.88 to 0.91 during the first time interval (12 months ending 2008-12-31 vs. 12 months ending 2007-12-31). For the second time interval, the Current Ratio increased from 0.91 to 1.2 (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). And for the final time interval, the Current Ratio increased from 1.2 to 1.23 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). The stock has gained 19.54% over the last year.

3. Dover Corp. (NYSE:DOV): Manufactures and sells industrial products and components and consumables. Market cap of $10.23B. Dividend yield at 2.28%, payout ratio at 25.25%. Current Ratio increased from 1.52 to 2.1 during the first time interval (12 months ending 2008-12-31 vs. 12 months ending 2007-12-31). For the second time interval, the Current Ratio increased from 2.1 to 2.6 (12 months ending 2009-12-31 vs. 12 months ending 2008-12-31). And for the final time interval, the Current Ratio increased from 2.6 to 2.73 (12 months ending 2010-12-31 vs. 12 months ending 2009-12-31). The stock has lost 1.31% over the last year.

4. Lowe's Companies Inc. (NYSE:LOW): Operates as a home improvement retailer in the United States, Canada and Mexico. Market cap of $30.96B. Dividend yield at 2.27%, payout ratio at 36.09%. Current Ratio increased from 1.12 to 1.22 during the first time interval (12 months ending 2009-01-30 vs. 12 months ending 2008-02-01). For the second time interval, the Current Ratio increased from 1.22 to 1.32 (12 months ending 2010-01-29 vs. 12 months ending 2009-01-30). And for the final time interval, the Current Ratio increased from 1.32 to 1.4 (12 months ending 2011-01-28 vs. 12 months ending 2010-01-29). The stock has lost 1.2% over the last year.

5. 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 $1.91B. Dividend yield at 2.06%, payout ratio at 34.58%. Current Ratio increased from 2.63 to 2.99 during the first time interval (12 months ending 2009-06-30 vs. 12 months ending 2008-06-30). For the second time interval, the Current Ratio increased from 2.99 to 4.07 (12 months ending 2010-06-30 vs. 12 months ending 2009-06-30). And for the final time interval, the Current Ratio increased from 4.07 to 4.38 (12 months ending 2011-06-30 vs. 12 months ending 2010-06-30). The stock is a short squeeze candidate, with a short float at 13.75% (equivalent to 21.19 days of average volume). The stock has gained 25.25% over the last year.

6. Nordson Corporation (NASDAQ:NDSN): Manufactures equipment used for precision dispensing, testing and inspection, and surface preparation and curing. Market cap of $2.69B. Dividend yield at 1.26%, payout ratio at 13.42%. Current Ratio increased from 1.88 to 2.22 during the first time interval (52 weeks ending 2009-10-31 vs. 52 weeks ending 2008-10-31). For the second time interval, the Current Ratio increased from 2.22 to 2.35 (52 weeks ending 2010-10-31 vs. 52 weeks ending 2009-10-31). And for the final time interval, the Current Ratio increased from 2.35 to 2.62 (52 weeks ending 2011-10-31 vs. 52 weeks ending 2010-10-31). It has been a rough couple of days for the stock, losing 14.75% over the last week.

*Dividend champions sourced from DRiP Investing, 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: 6 Dividend Champions With Consistently Rising Liquidity