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In this series what we are aiming to do is provide a range of key ratios and then pick one of the plays as our favorite play. We will provide some reasons for our choice and by doing this, we hope to impart some knowledge to those who are new to the field of dividend investing.

A lot of ratios will be used in this article, and it would be best for investors to get a handle on some of these ratios as they could prove to be very useful in the selection process. Some of the more important key ratios are listed below. A significant portion of the historical data used in this article was obtained from zacks.com.

Long-term debt-to-equity ratio is the total long term debt divided by the total equity. The amount of long-term debt a company carries on its balances sheet is very important for it indicates the amount of money a company owes that it doesn't expect to pay off in the next year. A balance sheet that illustrates that long term debt has been decreasing for a few years is a sign that the company is doing well. When debt levels fall, and cash levels increase the balance sheet is said to be improving and vice versa. If a company has too much debt on its books, it could end up being overwhelmed with interest payments and risk having too little working capital which could in the worst case scenario lead to bankruptcy.

Levered free cash flow is the amount of cash available to stock holders after interest payments on debt are made. A company with a small amount of debt will only have to spend a modest amount of money on interest payments, which in turn means that there is more money to send to shareholders in the form of dividends and vice versa.

The payout ratio tells us what portion of the profit is being returned to investors. A pay out ratio over 100% indicates that the company is paying out more money to shareholders, then they are making; this situation cannot last forever. In general if the company has a high operating cash flow and access to capital markets, they can keep this going on for a while. As companies usually only pay the portion of the debt that is coming due and not the whole debt, this technique/trick can technically be employed to maintain the dividend for sometime. If the payout ratio continues to increase, the situation warrants close monitoring as this cannot last forever; if your tolerance for risk is a low, look for similar companies with the same or higher yields, but with lower payout ratios. Individuals searching for other ideas might find this article to be of interest 5 Great Plays With Yields As High As 16.3%

Interest coverage is usually calculated by dividing the earnings before interest and taxes for a period of 1 year by the interest expenses for the same time period. This ratio informs you of a company's ability to make its interest payments on its outstanding debt. Lower interest coverage ratios indicate that there is a larger debt burden on the company and vice versa. For example if a company has an interest ratio of 11.8, this means that it covers interest expenses 11.8 times with operating profits.

Turnover Ratio lets you know the number of times a company's inventory is replaced in a given time period. It is calculated by dividing the cost of goods sold by average inventory during the time period studied. A high turnover ratio indicates that a company is producing and selling its good and services very quickly.

Debt to Equity Ratio is found by dividing the company's total amount of long-term debt (debts with interest rates that have a maturity longer than one year) by the total amount of equity. A debt to equity ratio of 0.5 tells us that the company is using 50 cents of liabilities in addition to each $1 dollar of shareholders equity in the business. There is no fixed ideal number as it depends on the industry the company is in. However, in general a ratio under 1 is acceptable and ideally it should be in the 0.5-0.6 ranges.

Current Ratio is obtained by dividing the current assets by current liabilities. This ratio allows you to see if the company can pay its current debts without potentially jeopardizing their future earnings. Ideally the company should have a ratio of 1 or higher.

Price to sales ratio is calculated by dividing the company's share price by its revenue per share. Generally, the smaller the ratio (less than 1.0) the better the investment since the investor is paying less for each unit of sales.

Quick ratio or acid -test is obtained by adding cash and cash equivalents plus marketable securities and accounts receivable dividing them by current liabilities. It is a measure of a company's ability to use its quick assets (assets that can be sold of immediately at close to book value) to pay off its current liabilities immediately. A company with a quick ratio of less than 1 cannot pay back its current liabilities. Additional key metrics are addressed in this article: "Linn Energy: A Long-Term Independent Oil And Gas Dividend play."

We generally base our choice on the following factors:

Net income should be generally trending upwards for the past 3-4 years.

Total cash flow from operating activities also should be trending upwards for the past 3-4 years.

Payout ratio should generally be below 100%, but a ratio below 70% is optimal. Payout ratios are not that important when it comes to MLPS/REITS as they generally pay a majority of their cash flow as distributions; in the case of REITS by law they have to pay out 90% of their cash flow as dividends. Payout ratios are calculated by dividing the dividend/distribution rate by the net income per share, and this is why the payout ratio for MLPs and REITS is often higher than 100%. The more important ratio to focus on is the cash flow per unit. If one focuses on the cash flow per unit, one will see that in most cases, it exceeds the distribution/dividend declared per unit/share.

Current ratio should be above 1.

Interest coverage ratio: any value above 1.5 is okay, but we would aim for 2.5-3.00 as our starting range. The higher the number the better.

Dividend growth rate should be at 5% or higher. A high yield with a low dividend growth rate is not good in the long run, but neither is a low dividend yield with a high growth rate; one needs to find an equilibrium here.

Five year dividend average: we generally aim for stocks that have a yield of 4.5% or higher. There are exceptions to this rule. Some stocks appreciate very fast, so even though the yield might be low, one can more than make up the difference through capital gains. One example is JAH.

Sales should generally be trending upwards for the past 3-4 years.

Levered free cash flow is the icing on the cake; if a company meets most of the above requirements and also has a positive levered free cash flow; it can generally be viewed as a good long term buy. Two examples are LEG and PG.

An early warning signal that the company could be in trouble is when the total cash flow generated from operating expenses is not enough to meet the dividend payments. This information can be gleaned by looking at the cash flow statement; this is readily available at yahoo finance. In the example below we used LEG and the data was obtained from Yahoo Finance.

The cash flow in this case was more than enough to easily cover all the dividend payments for all the above years; in this the time period was from 2008-2010. Many traders use other metrics and that is fine; we are just trying to provide a guideline. As you get better handle of the ratios explained below you can create your own list of criteria.

Our favorite play on the list would have been Cenar for it has provided its investors with an incredible 10-year return, and its long-term prospects are very bright, but it pays no dividend. 100K invested in CERN would have grown to over 550K in 10 years. We settled for LO because it offers a decent yield and has also provided a very strong rate of return for its investors.

Lorillard, Inc Common Stock (NYSE:LO) is our favorite play on this list for reasons:

  • It has a strong free cash flow of $1.12 billion.
  • A dividend yield of 4.8%
  • Earnings per share are projected to increase from $7.88 in 2011, to $8.92 in 2012 to $9.87 in 2013.
  • Net income has been rising for the past three years
  • It has a five year dividend yield of 4.44%
  • A strong five year dividend growth of 29.76%
  • Sales have risen nicely over the past three years from $5.2 billion in 2009 to $6.4 billion in 2011.
  • A decent payout ratio of 70%
  • A decent quick ratio of 1.54
  • A strong interest coverage ratio of 15.14
  • A 5 year average payout ratio of 60%
  • A current ratio of 1.73
  • A strong ROI of 92%
  • It has a free cash flow yield of 6.44%
  • 100K invested for 10 years would have grown to 472K.

Company: Lorillard Co

Free Cash Flow = $1.12 billion

Basic Key ratios

  • Percentage Held by Insiders = 0.33
  • Market Cap ($mil) = 17424
  • Number of Institutional Sellers 12 Weeks = N/A
  • 3 Month % Chg Short Interest = n/a

Growth

  • Net Income ($mil) 12/2011 = 1116
  • Net Income ($mil) 12/2010 = 1029
  • Net Income ($mil) 12/2009 = 948
  • 12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 8.56
  • Q Net Incm this Q/ same qtr yr ago = 19.69

  • EBITDA ($mil) 12/2011 = N/A
  • EBITDA ($mil) 12/2010 = 1764
  • EBITDA ($mil) 12/2009 = 1578
  • Net Incm Rpt Qtr ($mil) = 310
  • Anl Net Incm this Yr/ Net Incm last Yr = 8.46
  • Cash Flow ($/sh) 12/2011 = N/A
  • Cash Flow ($/sh) 12/2010 = 7.11
  • Cash Flow ($/sh) 12/2009 = 6.1
  • Div 5yr Growth 12/2011 = 29.76
  • Sales ($mil) 12/2011 = 6466
  • Sales ($mil) 12/2010 = 5932
  • Sales ($mil) 12/2009 = 5233

Dividend history

  • Div Yield = 4.03
  • Div Yld 5 Yr Avg 12/2011 = 4.44
  • Div Yld 5 Yr Avg 09/2011 = 4.36
  • Annual Dividend 12/2011 = 5.2
  • Annual Dividend 12/2010 = 4.25
  • Forward Yield = 4.8
  • Div 5yr Growth 12/2011 = 29.76
  • R-squared Div Growth 12/2011 = 0.85
  • R-squared Div Growth 09/2011 = 0.86

Dividend sustainability

  • Payout Ratio 09/2011 = 0.7
  • Payout Ratio 06/2011 = 0.71
  • Payout Ratio 5 Yr Avg 12/2011 = 0.6
  • Payout Ratio 5 Yr Avg 09/2011 = 0.59
  • Payout Ratio 5 Yr Avg 06/2011 = 0.57
  • Change in Payout Ratio = 0.06

Performance

  • % Ch Price 52 Wks Rel to S&P 500 = 57.52
  • Std Dev Target Price Est = 12.05
  • Avg EPS Surprise Last 4 Qtr = 4.44
  • EPS % Change F2/F1 = 10.71
  • Next 3-5 Yr Est EPS Gr rate = 7
  • Std Dev 3-5 Yr Est EPS Gr rate = N/A
  • EPS Gr Q(1)/Q(-3) = -126.44
  • 5 Yr Hist EPS Gr 12/2011 = 12.03
  • 5 Yr Hist EPS Gr 09/2011 = 11.52
  • ROE 5 Yr Avg 12/2011 = N/A
  • ROE 5 Yr Avg 09/2011 = N/A
  • ROE 5 Yr Avg 06/2011 = N/A
  • Return on Investment 12/2011 = 92.58
  • Return on Investment 09/2011 = 81.63
  • Return on Investment 06/2011 = 76.83
  • Debt/Tot Cap 5 Yr Avg 12/2011 = N/A
  • Debt/Tot Cap 5 Yr Avg 09/2011 = N/A
  • Debt/Tot Cap 5 Yr Avg 06/2011 = N/A
  • Current Ratio 12/2011 = 1.73
  • Current Ratio 09/2011 = 1.93
  • Current Ratio 06/2011 = 1.75
  • Curr Ratio 5 Yr Avg = 1.85
  • Quick Ratio = 1.54
  • Cash Ratio = 1.48
  • Interest Coverage 12/2011 = 15.14
  • Interest Coverage 09/2011 = 13.38
  • Interest Coverage 06/2011 = 17.43

Valuation

  • Book Value Qtr ($/sh) 12/2011 = -11.21
  • Book Value Qtr ($/sh) 09/2011 = -8.48
  • Book Value Qtr ($/sh) 06/2011 = -5.78
  • Anl EPS before NRI 12/2007 = 4.91
  • Anl EPS before NRI 12/2008 = 5.15
  • Anl EPS before NRI 12/2009 = 5.76
  • Anl EPS before NRI 12/2010 = 6.78
  • Anl EPS before NRI 12/2011 = 7.88
  • Price/ Book = N/A
  • Price/ Cash Flow = 18.15
  • Price/ Sales = 2.69
  • EV/EBITDA 12 Mo = 10.42
  • P/E/G F1 = 2.07
  • Q1 Std Dev/ Consensus = 0.03
  • R-squared EPS Growth 12/2011 = 0.94
  • R-squared EPS Growth 09/2011 = 0.94
  • P/E F1/ LT EPS Gr = 2.07
  • Std Dev Cons Current Qtr = 0.07
  • Median Est Next Qtr = 2.32
  • # Anlst in Cons Q3 = 7

Company: Cerner Corp (NASDAQ:CERN)

Free cash flow = $420 million

Basic Key ratios

  • Percentage Held by Insiders = 15.09
  • Market Cap ($mil) = 12026
  • Number of Institutional Sellers 12 Weeks = 2
  • 3 Month % Chg Short Interest = n/a

Growth

  • Net Income ($mil) 12/2011 = 237
  • Net Income ($mil) 12/2010 = 193
  • Net Income ($mil) 12/2009 = 188
  • 12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 29.53
  • Q Net Incm this Q/ same qtr yr ago = 30.12

Total cash flow from operating activities

  • 2009 = $281.8 million
  • 2010 = $347.2 million
  • 2011 = $456.4 million

  • EBITDA ($mil) 12/2011 = 556
  • EBITDA ($mil) 12/2010 = 482
  • EBITDA ($mil) 12/2009 = N/A
  • Net Incm Rpt Qtr ($mil) = 92
  • Anl Net Incm this Yr/ Net Incm last Yr = 29.23
  • Cash Flow ($/sh) 12/2011 = 2.6
  • Cash Flow ($/sh) 12/2010 = 2.35
  • Cash Flow ($/sh) 12/2009 = N/A
  • Sales ($mil) 12/2011 = 1850
  • Sales ($mil) 12/2010 = 1672
  • Sales ($mil) 12/2009 = N/A

Performance

  • % Ch Price 52 Wks Rel to S&P 500 = 40.39
  • Std Dev Target Price Est = 8.62
  • Avg EPS Surprise Last 4 Qtr = 3.15
  • EPS % Change F2/F1 = 21.66
  • Next 3-5 Yr Est EPS Gr rate = 19.8
  • Std Dev 3-5 Yr Est EPS Gr rate = 3.19
  • EPS Gr Q(1)/Q(-3) = -129.27
  • 5 Yr Hist EPS Gr 12/2011 = 20.95
  • 5 Yr Hist EPS Gr 09/2011 = N/A
  • ROE 5 Yr Avg 12/2011 = 13.2
  • ROE 5 Yr Avg 09/2011 = 13.13
  • ROE 5 Yr Avg 06/2011 = N/A
  • Return on Investment 12/2011 = 13.32
  • Return on Investment 09/2011 = 13.1
  • Return on Investment 06/2011 = N/A
  • Debt/Tot Cap 5 Yr Avg 12/2011 = 9.05
  • Debt/Tot Cap 5 Yr Avg 09/2011 = 9.74
  • Debt/Tot Cap 5 Yr Avg 06/2011 = N/A
  • Current Ratio 12/2011 = 3.77
  • Current Ratio 09/2011 = 3.74
  • Current Ratio 06/2011 = N/A
  • Curr Ratio 5 Yr Avg = 3.16
  • Quick Ratio = 3.37
  • Cash Ratio = 2.09
  • Interest Coverage 12/2011 = 92.23
  • Interest Coverage 09/2011 = 104.6
  • Interest Coverage 06/2011 = N/A

Valuation

  • Book Value Qtr ($/sh) 12/2011 = 13.06
  • Book Value Qtr ($/sh) 09/2011 = 12.62
  • Book Value Qtr ($/sh) 06/2011 = N/A
  • Anl EPS before NRI 12/2007 = 0.76
  • Anl EPS before NRI 12/2008 = 1.04
  • Anl EPS before NRI 12/2009 = 1.04
  • Anl EPS before NRI 12/2010 = 1.16
  • Anl EPS before NRI 12/2011 = 1.39
  • Price/ Book = 5.2
  • Price/ Cash Flow = 23.16
  • Price/ Sales = 5.46
  • EV/EBITDA 12 Mo = 16.62
  • P/E/G F1 = 1.66
  • Q1 Std Dev/ Consensus = 0.02
  • R-squared EPS Growth 12/2011 = 0.99
  • R-squared EPS Growth 09/2011 = N/A
  • P/E F1/ LT EPS Gr = 1.66
  • Std Dev Cons Current Qtr = 0.01
  • Median Est Next Qtr = 0.51
  • # Anlst in Cons Q3 = 12

Company: 3M Co (NYSE:MMM)

Levered Free Cash Flow = 2.97B

Basic Key ratios

  • Percentage Held by Insiders = 0.69
  • Market Cap ($mil) = 61723
  • Number of Institutional Sellers 12 Weeks = 12
  • 3 Month % Chg Short Interest = n/a

Growth

  • Net Income ($mil) 12/2011 = 4283
  • Net Income ($mil) 12/2010 = 4085
  • Net Income ($mil) 12/2009 = 3193
  • 12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 4.85
  • Q Net Incm this Q/ same qtr yr ago = 2.8
  • EBITDA ($mil) 12/2011 = 7453
  • EBITDA ($mil) 12/2010 = 7076
  • EBITDA ($mil) 12/2009 = 6008
  • Net Incm Rpt Qtr ($mil) = 954
  • Anl Net Incm this Yr/ Net Incm last Yr = 4.85
  • Cash Flow ($/sh) 12/2011 = 7.88
  • Cash Flow ($/sh) 12/2010 = 7.4
  • Cash Flow ($/sh) 12/2009 = 6.31
  • Div 5yr Growth 12/2011 = 3.14
  • Sales ($mil) 12/2011 = 29611
  • Sales ($mil) 12/2010 = 26662
  • Sales ($mil) 12/2009 = 23123

Dividend history

  • Div Yield = 2.68
  • Div Yld 5 Yr Avg 12/2011 = 2.68
  • Div Yld 5 Yr Avg 09/2011 = 2.66
  • Annual Dividend 12/2011 = 2.2
  • Annual Dividend 12/2010 = 2.1
  • Forward Yield = 2.68
  • Div 5yr Growth 12/2011 = 3.14
  • R-squared Div Growth 12/2011 = 0.95
  • R-squared Div Growth 09/2011 = 0.94

Dividend sustainability

  • Payout Ratio 09/2011 = 0.37
  • Payout Ratio 06/2011 = 0.37
  • Payout Ratio 5 Yr Avg 12/2011 = 0.4
  • Payout Ratio 5 Yr Avg 09/2011 = 0.4
  • Payout Ratio 5 Yr Avg 06/2011 = 0.4
  • Change in Payout Ratio = -0.03

Performance

  • % Ch Price 52 Wks Rel to S&P 500 = -7.33
  • Std Dev Target Price Est = 10.88
  • Avg EPS Surprise Last 4 Qtr = 0.42
  • EPS % Change F2/F1 = 11.11
  • Next 3-5 Yr Est EPS Gr rate = 11.33
  • Std Dev 3-5 Yr Est EPS Gr rate = 3.22
  • EPS Gr Q(1)/Q(-3) = -106.3
  • 5 Yr Hist EPS Gr 12/2011 = 4.88
  • 5 Yr Hist EPS Gr 09/2011 = 4.81
  • ROE 5 Yr Avg 12/2011 = 29.67
  • ROE 5 Yr Avg 09/2011 = 29.97
  • ROE 5 Yr Avg 06/2011 = 30.28
  • Return on Investment 12/2011 = 19.85
  • Return on Investment 09/2011 = 19.76
  • Return on Investment 06/2011 = 20.18
  • Debt/Tot Cap 5 Yr Avg 12/2011 = 24.56
  • Debt/Tot Cap 5 Yr Avg 09/2011 = 23.93
  • Debt/Tot Cap 5 Yr Avg 06/2011 = 23.33
  • Current Ratio 12/2011 = 2.25
  • Current Ratio 09/2011 = 2.22
  • Current Ratio 06/2011 = 2.18
  • Curr Ratio 5 Yr Avg = 1.91
  • Quick Ratio = 1.62
  • Cash Ratio = 0.91
  • Interest Coverage 12/2011 = 30.53
  • Interest Coverage 09/2011 = 33.15
  • Interest Coverage 06/2011 = 33.28

Valuation

  • Book Value Qtr ($/sh) 12/2011 = 22.63
  • Book Value Qtr ($/sh) 09/2011 = 24.54
  • Book Value Qtr ($/sh) 06/2011 = 24.97
  • Anl EPS before NRI 12/2007 = 4.98
  • Anl EPS before NRI 12/2008 = 5.16
  • Anl EPS before NRI 12/2009 = 4.69
  • Anl EPS before NRI 12/2010 = 5.75
  • Anl EPS before NRI 12/2011 = 5.96
  • Price/ Book = 3.89
  • Price/ Cash Flow = 11.18
  • Price/ Sales = 2.08
  • EV/EBITDA 12 Mo = 8.39
  • P/E/G F1 = 1.23
  • Q1 Std Dev/ Consensus = 0.02
  • R-squared EPS Growth 12/2011 = 0.46
  • R-squared EPS Growth 09/2011 = 0.46
  • P/E F1/ LT EPS Gr = 1.23
  • Std Dev Cons Current Qtr = 0.03
  • Median Est Next Qtr = 1.64
  • # Anlst in Cons Q3 = 10

Company: Genuine Parts (NYSE:GPC)

Levered Free Cash Flow = 473.40M

Basic Key ratios

  • Percentage Held by Insiders = 3.4
  • Market Cap ($mil) = 9683
  • Number of Institutional Sellers 12 Weeks = 1
  • 3 Month % Chg Short Interest = n/a

Growth

  • Net Income ($mil) 12/2011 = 565
  • Net Income ($mil) 12/2010 = 476
  • Net Income ($mil) 12/2009 = 400
  • 12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 18.84
  • Q Net Incm this Q/ same qtr yr ago = 13.74
  • EBITDA ($mil) 12/2011 = N/A
  • EBITDA ($mil) 12/2010 = 879
  • EBITDA ($mil) 12/2009 = 762
  • Net Incm Rpt Qtr ($mil) = 135
  • Anl Net Incm this Yr/ Net Incm last Yr = 18.84
  • Cash Flow ($/sh) 12/2011 = 4.2
  • Cash Flow ($/sh) 12/2010 = 3.59
  • Cash Flow ($/sh) 12/2009 = 3.07
  • Div 5yr Growth 12/2011 = 4.61
  • Sales ($mil) 12/2011 = 12459
  • Sales ($mil) 12/2010 = 11208
  • Sales ($mil) 12/2009 = 10058

Dividend history

  • Div Yield = 2.89
  • Div Yld 5 Yr Avg 12/2011 = 3.69
  • Div Yld 5 Yr Avg 09/2011 = 3.69
  • Annual Dividend 12/2011 = 1.8
  • Annual Dividend 12/2010 = 1.64
  • Forward Yield = 3.18
  • Div 5yr Growth 12/2011 = 4.61
  • R-squared Div Growth 12/2011 = 0.9
  • R-squared Div Growth 09/2011 = 0.89

Dividend sustainability

  • Payout Ratio 09/2011 = 0.52
  • Payout Ratio 06/2011 = 0.54
  • Payout Ratio 5 Yr Avg 12/2011 = 0.55
  • Payout Ratio 5 Yr Avg 09/2011 = 0.55
  • Payout Ratio 5 Yr Avg 06/2011 = 0.55
  • Change in Payout Ratio = -0.05

Performance

  • % Ch Price 52 Wks Rel to S&P 500 = 14.58
  • Std Dev Target Price Est = 4
  • Avg EPS Surprise Last 4 Qtr = 4.71
  • EPS % Change F2/F1 = 8.33
  • Next 3-5 Yr Est EPS Gr rate = 8.79
  • Std Dev 3-5 Yr Est EPS Gr rate = 1.11
  • EPS Gr Q(1)/Q(-3) = -114.67
  • 5 Yr Hist EPS Gr 12/2011 = 2.38
  • 5 Yr Hist EPS Gr 09/2011 = 1.35
  • ROE 5 Yr Avg 12/2011 = 17.82
  • ROE 5 Yr Avg 09/2011 = 17.71
  • ROE 5 Yr Avg 06/2011 = 17.61
  • Return on Investment 12/2011 = 17.74
  • Return on Investment 09/2011 = 17.56
  • Return on Investment 06/2011 = 16.73
  • Debt/Tot Cap 5 Yr Avg 12/2011 = 13.57
  • Debt/Tot Cap 5 Yr Avg 09/2011 = 13.63
  • Debt/Tot Cap 5 Yr Avg 06/2011 = 14.07
  • Current Ratio 12/2011 = 2.53
  • Current Ratio 09/2011 = 2.07
  • Current Ratio 06/2011 = 2.2
  • Curr Ratio 5 Yr Avg = 2.66
  • Quick Ratio = 1.28
  • Cash Ratio = 0.47
  • Interest Coverage 12/2011 = N/A
  • Interest Coverage 09/2011 = N/A
  • Interest Coverage 06/2011 = N/A

Valuation

  • Book Value Qtr ($/sh) 12/2011 = 17.94
  • Book Value Qtr ($/sh) 09/2011 = 18.44
  • Book Value Qtr ($/sh) 06/2011 = 18.63
  • Anl EPS before NRI 12/2007 = 2.98
  • Anl EPS before NRI 12/2008 = 2.92
  • Anl EPS before NRI 12/2009 = 2.5
  • Anl EPS before NRI 12/2010 = 3
  • Anl EPS before NRI 12/2011 = 3.58
  • Price/ Book = 3.47
  • Price/ Cash Flow = 14.81
  • Price/ Sales = 0.78
  • EV/EBITDA 12 Mo = 10.99
  • P/E/G F1 = 1.76
  • Q1 Std Dev/ Consensus = 0.02
  • R-squared EPS Growth 12/2011 = 0.11
  • R-squared EPS Growth 09/2011 = 0.05
  • P/E F1/ LT EPS Gr = 1.76
  • Std Dev Cons Current Qtr = 0.02
  • Median Est Next Qtr = 1.06
  • # Anlst in Cons Q3 = 5

Company: Schweitzer-Maud (NYSE:SWM)

Levered Free Cash Flow = -275.00K

Basic Key ratios

  • Percentage Held by Insiders = 2.68
  • Market Cap ($mil) = 1132
  • Number of Institutional Sellers 12 Weeks = N/A
  • 3 Month % Chg Short Interest = n/a

Growth

  • Net Income ($mil) 12/2011 = 93
  • Net Income ($mil) 12/2010 = 65
  • Net Income ($mil) 12/2009 = 36
  • 12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 41.81
  • Q Net Incm this Q/ same qtr yr ago = 247.45
  • EBITDA ($mil) 12/2011 = 154
  • EBITDA ($mil) 12/2010 = 143
  • EBITDA ($mil) 12/2009 = 127
  • Net Incm Rpt Qtr ($mil) = 48
  • Anl Net Incm this Yr/ Net Incm last Yr = 41.81
  • Cash Flow ($/sh) 12/2011 = 9.01
  • Cash Flow ($/sh) 12/2010 = 6.29
  • Cash Flow ($/sh) 12/2009 = 6.1
  • Div 5yr Growth 12/2011 = 0

  • Sales ($mil) 12/2011 = 816
  • Sales ($mil) 12/2010 = 740
  • Sales ($mil) 12/2009 = 740

Dividend history

  • Div Yield = 0.86
  • Div Yld 5 Yr Avg 12/2011 = 1.9
  • Div Yld 5 Yr Avg 09/2011 = 1.98
  • Annual Dividend 12/2011 = 0.6
  • Annual Dividend 12/2010 = 0.6
  • Forward Yield = 0.86
  • Div 5yr Growth 12/2011 = 0
  • R-squared Div Growth 12/2011 = 0
  • R-squared Div Growth 09/2011 = 0

Dividend sustainability

  • Payout Ratio 09/2011 = 0.13
  • Payout Ratio 06/2011 = 0.14
  • Payout Ratio 5 Yr Avg 12/2011 = 0.38
  • Payout Ratio 5 Yr Avg 09/2011 = 0.41
  • Payout Ratio 5 Yr Avg 06/2011 = 0.44
  • Change in Payout Ratio = -0.29

Performance

  • % Ch Price 52 Wks Rel to S&P 500 = 22.86
  • Std Dev Target Price Est = 3.54
  • Avg EPS Surprise Last 4 Qtr = 13.01
  • EPS % Change F2/F1 = 7.29
  • Next 3-5 Yr Est EPS Gr rate = 15
  • Std Dev 3-5 Yr Est EPS Gr rate = N/A
  • EPS Gr Q(1)/Q(-3) = 1-148.60
  • 5 Yr Hist EPS Gr 12/2011 = 63.61
  • 5 Yr Hist EPS Gr 09/2011 = 61.31
  • ROE 5 Yr Avg 12/2011 = 11.35
  • ROE 5 Yr Avg 09/2011 = 10.44
  • ROE 5 Yr Avg 06/2011 = 9.88
  • Return on Investment 12/2011 = 17.29
  • Return on Investment 09/2011 = 13.52
  • Return on Investment 06/2011 = 13.25
  • Debt/Tot Cap 5 Yr Avg 12/2011 = 22.31
  • Debt/Tot Cap 5 Yr Avg 09/2011 = 22.37
  • Debt/Tot Cap 5 Yr Avg 06/2011 = 22.14
  • Current Ratio 12/2011 = 2.32
  • Current Ratio 09/2011 = 2.1
  • Current Ratio 06/2011 = 2.08
  • Curr Ratio 5 Yr Avg = 1.57
  • Quick Ratio = 1.51
  • Cash Ratio = 0.72
  • Interest Coverage 12/2011 = 60.5
  • Interest Coverage 09/2011 = 9.18
  • Interest Coverage 06/2011 = 45

Valuation

  • Book Value Qtr ($/sh) 12/2011 = 29.43
  • Book Value Qtr ($/sh) 09/2011 = 27.38
  • Book Value Qtr ($/sh) 06/2011 = 27.92
  • Anl EPS before NRI 12/2007 = 1.2
  • Anl EPS before NRI 12/2008 = 0.71
  • Anl EPS before NRI 12/2009 = 4.25
  • Anl EPS before NRI 12/2010 = 4.38
  • Anl EPS before NRI 12/2011 = 6.39
  • Price/ Book = 2.38
  • Price/ Cash Flow = 7.78
  • Price/ Sales = 1.39
  • EV/EBITDA 12 Mo = 7.76
  • P/E/G F1 = 0.64
  • Q1 Std Dev/ Consensus = 0.01
  • R-squared EPS Growth 12/2011 = 0.8
  • R-squared EPS Growth 09/2011 = 0.79
  • P/E F1/ LT EPS Gr = 0.64
  • Std Dev Cons Current Qtr = 0.03
  • Median Est Next Qtr = 1.81
  • # Anlst in Cons Q3 = 3

Conclusion

The markets are extremely overbought, and long term investors would be best served by waiting for the markets to pull back strongly before committing fresh sums of money to this market.

EPS and EPS surprise charts sourced from Zacks.com. Dividend history charts sourced from dividata.com. Free cash flow yield chart sourced from Ycharts.com.

Source: 5 Interesting Long-Term Dividend Plays

Additional disclosure: This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies -- let the buyer beware.