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If you like seeking the safety of dividend income, here are some ideas to start your stock search.

We ran a screen on stocks paying dividend yields above 1% and sustainable payout ratios below 50% for those with encouraging trends in inventory relative to revenue. Since revenues fund company dividends, it's important to consider the quality of sales.

We searched for the following positive trends: growth in revenue exceeding growth in inventory, as well as inventory becoming a smaller portion of current assets. Although companies can change their policies in inventory, these trends generally indicate improving health of revenue and liquidity.

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.)

Do you think these companies pay attractive dividend yields? Use this list as a starting point for your own analysis.

List sorted by alphabetically.

1. AO Smith Corp. (AOS): Engages in the manufacture and sale of water heating equipment to the residential and commercial markets in the United States and internationally. PEG at 0.95. Dividend yield at 1.40%, payout ratio at 21.03%. Revenue grew by 28.53% during the most recent quarter ($475.8M vs. $370.2M y/y). Inventory grew by 14.71% during the same time period ($168.4M vs. $146.8M y/y). Inventory, as a percentage of current assets, decreased from 16.38% to 13.93% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

2. Barnes Group Inc. (B): Operates as an international logistical services company, and aerospace and industrial components manufacturer in the United States, Belgium, Brazil, Canada, China, Denmark, France, Germany, Holland, Italy, Korea, Mexico, Singapore, Spain, Sweden, Switzerland, Thailand, and the United Kingdom. PEG at 0.82. Dividend yield at 1.49%, payout ratio at 22.97%. Revenue grew by 12.24% during the most recent quarter ($325.39M vs. $289.9M y/y). Inventory grew by 7.34% during the same time period ($227.46M vs. $211.9M y/y). Inventory, as a percentage of current assets, decreased from 47.2% to 42.47% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

3. Bunge Limited (BG): Engages in the agriculture and food businesses worldwide. PEG at 0.92. Dividend yield at 1.72%, payout ratio at 14.14%. Revenue grew by 33.9% during the most recent quarter ($15,616M vs. $11,662M y/y). Inventory grew by 12.19% during the same time period ($6,247M vs. $5,568M y/y). Inventory, as a percentage of current assets, decreased from 41.78% to 41.17% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

4. Cummins Inc. (CMI): Designs, manufactures, distributes, and services diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide. PEG at 0.89. Dividend yield at 1.34%, payout ratio at 13.88%. Revenue grew by 18.89% during the most recent quarter ($4,921M vs. $4,139M y/y). Inventory grew by 8.3% during the same time period ($2,141M vs. $1,977M y/y). Inventory, as a percentage of current assets, decreased from 31.44% to 30.19% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

5. CONSOL Energy Inc. (CNX): Engages in the production of multi-fuel energy and provision of energy services primarily to the electric power generation industry in the United States. PEG at 0.60. Dividend yield at 1.34%, payout ratio at 15.24%. Revenue grew by 13.62% during the most recent quarter ($1,542.21M vs. $1,357.32M y/y). Inventory grew by -0.08% during the same time period ($258.33M vs. $258.54M y/y). Inventory, as a percentage of current assets, decreased from 23.19% to 13.61% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

6. Franklin Electric Co. Inc. (FELE): Engages in the design, manufacture, and distribution of groundwater and fuel pumping systems. PEG at 0.53. Dividend yield at 1.02%, payout ratio at 20.67%. Revenue grew by 19.1% during the most recent quarter ($224.39M vs. $188.41M y/y). Inventory grew by 10.09% during the same time period ($154.09M vs. $139.97M y/y). Inventory, as a percentage of current assets, decreased from 37.65% to 37.59% during the most recent quarter (comparing 13 weeks ending 2011-10-01 to 13 weeks ending 2010-10-02).

7. Goldcorp Inc. (GG): Engages in the acquisition, exploration, development, and operation of precious metal properties in Canada, the United States, Mexico, and Central and South America. PEG at 0.48. Dividend yield at 1.14%, payout ratio at 16.11%. Revenue grew by 47.8% during the most recent quarter ($1,308M vs. $885M y/y). Inventory grew by 33.72% during the same time period ($529M vs. $395.6M y/y). Inventory, as a percentage of current assets, decreased from 20.91% to 19.07% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

8. HSN, Inc. (HSNI): Markets and sells a range of third party and private label merchandise primarily in the United States. PEG at 0.92. Dividend yield at 1.40%, payout ratio at 6.25%. Revenue grew by 6.05% during the most recent quarter ($751.24M vs. $708.36M y/y). Inventory grew by 2.78% during the same time period ($347.8M vs. $338.38M y/y). Inventory, as a percentage of current assets, decreased from 42.08% to 37.92% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

9. IRSA Investments and Representations Inc. (IRS): Engages in a range of diversified real estate related activities in Argentina. PEG at 0.88. Dividend yield at 8.13%, payout ratio at 0.00%. Revenue grew by 12.03% during the most recent quarter ($343.68M vs. $306.78M y/y). Inventory grew by -17.65% during the same time period ($241.86M vs. $293.69M y/y). Inventory, as a percentage of current assets, decreased from 25.26% to 21.38% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

10. ITT Corporation (ITT): Designs, manufactures, and sells a range of engineered products, and provides related services worldwide. PEG at 0.32. Dividend yield at 1.61%, payout ratio at 29.02%. Revenue grew by 12.79% during the most recent quarter ($2,981M vs. $2,643M y/y). Inventory grew by 7.32% during the same time period ($1,011M vs. $942M y/y). Inventory, as a percentage of current assets, decreased from 22.12% to 15.44% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

11. Koppers Holdings Inc. (KOP): Provides carbon compounds and commercial wood treatment products to aluminum, railroad, specialty chemical, utility, rubber, concrete, and steel industries. PEG at 0.81. Dividend yield at 2.22%, payout ratio at 32.25%. Revenue grew by 19.24% during the most recent quarter ($401M vs. $336.3M y/y). Inventory grew by 10.44% during the same time period ($167.1M vs. $151.3M y/y). Inventory, as a percentage of current assets, decreased from 39.77% to 38.38% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

12. Kronos Worldwide Inc. (KRO): Engages in the production and marketing of titanium dioxide pigments in North America and Europe. PEG at 0.51. Dividend yield at 2.44%, payout ratio at 44.81%. Revenue grew by 45.51% during the most recent quarter ($548M vs. $376.6M y/y). Inventory grew by 33.88% during the same time period ($336.7M vs. $251.5M y/y). Inventory, as a percentage of current assets, decreased from 44.23% to 40.06% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

13. Noranda Aluminum Holding Corp. (NOR): Engages in the production and sale of primary aluminum products and rolled aluminum coils in the United States. PEG at 0.30. Dividend yield at 1.07%, payout ratio at 0.00%. Revenue grew by 27.42% during the most recent quarter ($400.4M vs. $314.23M y/y). Inventory grew by 4.08% during the same time period ($203.9M vs. $195.91M y/y). Inventory, as a percentage of current assets, decreased from 51.89% to 40.85% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

14. Penske Automotive Group, Inc. (PAG): Operates as an automotive retailer in the United States, Puerto Rico, the United Kingdom, and Germany. PEG at 0.74. Dividend yield at 1.66%, payout ratio at 8.40%. Revenue grew by 10.54% during the most recent quarter ($2,951.05M vs. $2,669.77M y/y). Inventory grew by 3.04% during the same time period ($1,481.63M vs. $1,437.94M y/y). Inventory, as a percentage of current assets, decreased from 74.83% to 73.44% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

15. PolyOne Corporation (POL): Provides specialized polymer materials, services, and solutions with operations in thermoplastic compounds, specialty polymer formulations, color and additive systems, thermoplastic resin distribution, and specialty polyvinyl chloride resins. PEG at 0.46. Dividend yield at 1.05%, payout ratio at 4.29%. Revenue grew by 8.08% during the most recent quarter ($735.8M vs. $680.8M y/y). Inventory grew by 2.52% during the same time period ($240.2M vs. $234.3M y/y). Inventory, as a percentage of current assets, decreased from 25.48% to 22.85% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

16. Steel Dynamics Inc. (STLD): Engages in the manufacture and sale of steel products in the United States. PEG at 0.76. Dividend yield at 2.45%, payout ratio at 31.44%. Revenue grew by 21.61% during the most recent quarter ($1,858.35M vs. $1,528.13M y/y). Inventory grew by 7.68% during the same time period ($1,199.58M vs. $1,114.06M y/y). Inventory, as a percentage of current assets, decreased from 55.7% to 48.86% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

17. United Stationers Inc. (USTR): Engages in the wholesale distribution of business products in North America. PEG at 0.96. Dividend yield at 1.50%, payout ratio at 15.47%. Revenue grew by 3.1% during the most recent quarter ($1,310.03M vs. $1,270.7M y/y). Inventory grew by -0.31% during the same time period ($615.51M vs. $617.44M y/y). Inventory, as a percentage of current assets, decreased from 45.99% to 45.53% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

18. Valero Energy Corp. (VLO): Operates as an independent petroleum refining and marketing company. PEG at 0.66. Dividend yield at 2.41%, payout ratio at 5.06%. Revenue grew by 60.42% during the most recent quarter ($33,713M vs. $21,015M y/y). Inventory grew by 7.49% during the same time period ($5,164M vs. $4,804M y/y). Inventory, as a percentage of current assets, decreased from 40.45% to 32.54% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

Accounting data sourced from Google Finance; all other data sourced from Finviz.

Source: 18 Undervalued Dividend Stocks With Positive Inventory Trends