Seeking Alpha
Profile| Send Message|
( followers)  

In this series, we pick one stock as our favorite and list some of the reasons we chose that stock. 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 most important key ratios are listed below

We generally base our choice on the following factors

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

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

Payout ratio: it 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: it 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 Jarden Corporation (NYSE:JAH).

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

Levered free cash flow: this 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 Leggett & Platt (NYSE:LEG) and Procter&Gamble (NYSE: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.

A lot of ratios will be used in this article and investors would be best served by getting a handle on some of the more important ones as they could prove to be very useful during the selection process.

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, and 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.

Cash ratio: This is the ratio of the company's total cash and cash equivalents to its current liabilities; this ratio is used a measure of a company's liquidity. It allows investors to determine how fast the company would be able to pay its short-term debts if push came to shove. Higher numbers are better because it makes it easier for a company to ask for new loans, increase in credit lines, etc.

Free cash flow yield: is obtained by dividing free cash flow per share by the current price of each share. Generally lower ratios are associated with an unattractive investment and vic- versa. Free cash flow takes into account capital expenditures and other ongoing costs associated with the day-to-day to functions of the business. In our view, free cash flow yield is a better valuation metric then earnings yield because of the above factor

Levered free cash flow is the amount of cash available to stockholders 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.

Operating cash flow is generally a better metric than earnings per share because a company can show positive net earnings and still not be able to properly service its debt; the cash flow is what pays the bills.

The payout ratio tells us what portion of the profit is being returned to investors. A payout ratio over 100% indicates that the company is paying out more money to shareholders than 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 Is Frontier Communications A Long-Term Buy?

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.

ROE is obtained by dividing the net income by shareholder's equity. It measures how much profit a company generates with the money shareholders have invested in it.

Price to tangible book is obtained by dividing share price by tangible book value per share. The ratio gives investors some idea of whether they are paying too much for what would be left over if the company were to declare bankruptcy immediately. In general, stocks that trade at higher price to tangible book value could leave investors facing a greater percentage per share loss than those that trade at lower ratios. The price to tangible book value is theoretically the lowest possible price the stock would trade to.

Quick ratio or acid-test is obtained by adding cash and cash equivalents plus marketable securities and accounts receivable and 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 5 Great Canadian Plays With Tempting Yields

Sociedad Quimica y Minera (NYSE:SQM) is our favorite play for the following reasons:

A positive levered free cash flow of $24.7 million

A strong quarterly earnings growth of 51%

A decent quarterly revenue growth rate of 25%

Net income has generally been trending upwards for the past few years.

Cash flow per share has increased from $1.78 in 2009 to $2.02 in 2010.

Sales have been trending upwards for the past few years and it sports a five year sales growth average of 13.9%

A good 5 year dividend growth rate of 20.79%

A great long-term debt to equity ratio of 0.57

Even though the yield is on the low side, capital gains have more than made up for this shortfall. The amount of money one would have made if one invested 100K for 10 years in SQM is astounding.

It has a very low payout ratio of 29% and a five year average payout ratio of only 42%

A strong 5 year ROE average of 24%

It has an excellent current ratio and quick ratio of 3.02 and 2.29 respectively.

A healthy interest coverage ratio of 17

Net earnings surged 45% from $382 million in 2010 to $545.8 million in 2011.

In 2011 revenues totaled $2.14 billion, a 17% jump from the $1.84 billion generated in 2010.

100K invested for 10 years would have grown to a stunning $2.5 million.

Company : Soc Quimica Min

Levered Free Cash Flow = 24.74M

Basic Key ratios

Percentage Held by Insiders = N/A

Market Cap ($mil) = 15510

Number of Institutional Sellers 12 Weeks = N/A

3 Month % Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 545

Net Income ($mil) 12/2010 = 382

Net Income ($mil) 12/2009 = 338

12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 40.06

Q Net Incm this Q/ same qtr yr ago = 51.06

EBITDA ($mil) 12/2011 = N/A

EBITDA ($mil) 12/2010 = 643

EBITDA ($mil) 12/2009 = 557

Net Incm Rpt Qtr ($mil) = 143

Anl Net Incm this Yr/ Net Incm last Yr = 12.96

Cash Flow ($/sh) 12/2011 = N/A

Cash Flow ($/sh) 12/2010 = 2.02

Cash Flow ($/sh) 12/2009 = 1.78

Div 5yr Growth 12/2011 = N/A

Sales ($mil) 12/2011 = N/A

Sales ($mil) 12/2010 = 1830

Sales ($mil) 12/2009 = 1437

Dividend history

Div Yield = 1.28

Div Yld 5 Yr Avg 12/2011 = N/A

Div Yld 5 Yr Avg 09/2011 = 1.59

Annual Dividend 12/2011 = 0.76

Annual Dividend 12/2010 = 0.51

Forward Yield = 1.28

Div 5yr Growth 12/2011 = N/A

R-squared Div Growth 12/2011 = N/A

R-squared Div Growth 09/2011 = 0.41

Dividend sustainability

Payout Ratio 09/2011 = N/A

Payout Ratio 06/2011 = 0.29

Payout Ratio 5 Yr Avg 12/2011 = N/A

Payout Ratio 5 Yr Avg 09/2011 = 0.42

Payout Ratio 5 Yr Avg 06/2011 = 0.42

Change in Payout Ratio = -0.13

Performance

% Ch Price 52 Wks Rel to S&P 500 = 1.25

Std Dev Target Price Est = 6.34

Avg EPS Surprise Last 4 Qtr = 6.83

EPS % Change F2/F1 = 24.42

Next 3-5 Yr Est EPS Gr rate = 16.86

Std Dev 3-5 Yr Est EPS Gr rate = N/A

EPS Gr Q(1)/Q(-3) = -135

5 Yr Hist EPS Gr 12/2011 = N/A

5 Yr Hist EPS Gr 09/2011 = N/A

ROE 5 Yr Avg 12/2011 = N/A

ROE 5 Yr Avg 09/2011 = 23.97

ROE 5 Yr Avg 06/2011 = 23.44

Return on Investment 12/2011 = N/A

Return on Investment 09/2011 = N/A

Return on Investment 06/2011 = 27.11

Debt/Tot Cap 5 Yr Avg 12/2011 = N/A

Debt/Tot Cap 5 Yr Avg 09/2011 = 15.08

Debt/Tot Cap 5 Yr Avg 06/2011 = 15.95

Current Ratio 12/2011 = N/A

Current Ratio 09/2011 = N/A

Current Ratio 06/2011 = 3.02

Curr Ratio 5 Yr Avg = 3.64

Quick Ratio = 2.29

Cash Ratio = 1.42

Interest Coverage 12/2011 = 17.60

Valuation

Book Value Qtr ($/sh) 12/2011 = N/A

Book Value Qtr ($/sh) 09/2011 = N/A

Book Value Qtr ($/sh) 06/2011 = 7.53

Anl EPS before NRI 12/2007 = 0.68

Anl EPS before NRI 12/2008 = 1.91

Anl EPS before NRI 12/2009 = 1.24

Anl EPS before NRI 12/2010 = 1.45

Anl EPS before NRI 12/2011 = N/A

Price/ Book = 7.83

Price/ Cash Flow = 29.15

Price/ Sales = N/A

EV/EBITDA 12 Mo = 23.42

P/E/G F1 = 1.3

Q1 Std Dev/ Consensus = 0.17

R-squared EPS Growth 12/2011 = N/A

R-squared EPS Growth 09/2011 = N/A

P/E F1/ LT EPS Gr = 1.3

Std Dev Cons Current Qtr = 0.1

Median Est Next Qtr = 0.68

# Anlst in Cons Q3 = 2

Company : Natl Grid -Adr (NYSE:NGG)

Levered Free Cash Flow = 742.79M

Basic Key ratios

Percentage Held by Insiders = N/A

Market Cap ($mil) = 36770

Number of Institutional Sellers 12 Weeks = N/A

3 Month % Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 3463

Net Income ($mil) 12/2010 = 2217

Net Income ($mil) 12/2009 = 1630

12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = N/A

Q Net Incm this Q/ same qtr yr ago = N/A

EBITDA ($mil) 12/2011 = 10120

EBITDA ($mil) 12/2010 = 8770

EBITDA ($mil) 12/2009 = 8720

Net Incm Rpt Qtr ($mil) = N/A

Anl Net Incm this Yr/ Net Incm last Yr = 56.18

Cash Flow ($/sh) 12/2011 = 6.61

Cash Flow ($/sh) 12/2010 = 8.07

Cash Flow ($/sh) 12/2009 = 6.83

Div 5yr Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 23242

Sales ($mil) 12/2010 = 21077

Sales ($mil) 12/2009 = 23793

Dividend history

Div Yield = 5.8

Div Yld 5 Yr Avg 12/2011 = N/A

Div Yld 5 Yr Avg 09/2011 = 5.36

Annual Dividend 12/2011 = 2.8

Annual Dividend 12/2010 = 2.89

Forward Yield = 5.83

Div 5yr Growth 12/2011 = N/A

R-squared Div Growth 12/2011 = N/A

R-squared Div Growth 09/2011 = 0.01

Dividend sustainability

Payout Ratio 09/2011 = N/A

Payout Ratio 06/2011 = N/A

Payout Ratio 5 Yr Avg 12/2011 = N/A

Payout Ratio 5 Yr Avg 09/2011 = N/A

Payout Ratio 5 Yr Avg 06/2011 = N/A

Change in Payout Ratio = N/A

Performance

% Ch Price 52 Wks Rel to S&P 500 = 6.03

Std Dev Target Price Est = 3.52

Avg EPS Surprise Last 4 Qtr = N/A

EPS % Change F2/F1 = 6.73

Next 3-5 Yr Est EPS Gr rate = 4.27

Std Dev 3-5 Yr Est EPS Gr rate = N/A

EPS Gr Q(1)/Q(-3) = N/A

5 Yr Hist EPS Gr 12/2011 = N/A

5 Yr Hist EPS Gr 09/2011 = N/A

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 = N/A

Return on Investment 09/2011 = N/A

Return on Investment 06/2011 = N/A

Debt/Tot Cap 5 Yr Avg 12/2011 = N/A

Debt/Tot Cap 5 Yr Avg 09/2011 = 70.46

Debt/Tot Cap 5 Yr Avg 06/2011 = 70.46

Current Ratio 12/2011 = N/A

Current Ratio 09/2011 = N/A

Current Ratio 06/2011 = 0.89

Curr Ratio 5 Yr Avg = 0.92

Quick Ratio = 0.88

Cash Ratio = 0.56

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 = N/A

Book Value Qtr ($/sh) 09/2011 = N/A

Book Value Qtr ($/sh) 06/2011 = 18.44

Anl EPS before NRI 12/2007 = 0.91

Anl EPS before NRI 12/2008 = 1.22

Anl EPS before NRI 12/2009 = 0.56

Anl EPS before NRI 12/2010 = 4.21

Anl EPS before NRI 12/2011 = 4.17

Price/ Book = 2.8

Price/ Cash Flow = 7.81

Price/ Sales = N/A

EV/EBITDA 12 Mo = N/A

P/E/G F1 = 3.04

Q1 Std Dev/ Consensus = N/A

R-squared EPS Growth 12/2011 = N/A

R-squared EPS Growth 09/2011 = N/A

P/E F1/ LT EPS Gr = 3.04

Std Dev Cons Current Qtr = N/A

Median Est Next Qtr = N/A

# Anlst in Cons Q3 = N/A

Company : Firstenergy Cp (NYSE:FE)

Levered Free Cash Flow = 532.80M

Basic Key ratios

Percentage Held by Insiders = 0.46

Market Cap ($mil) = 18602

Number of Institutional Sellers 12 Weeks = 1

3 Month % Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 885

Net Income ($mil) 12/2010 = 742

Net Income ($mil) 12/2009 = 872

12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 4.97

Q Net Incm this Q/ same qtr yr ago = -47.03

EBITDA ($mil) 12/2011 = 4102

EBITDA ($mil) 12/2010 = 3683

EBITDA ($mil) 12/2009 = 3922

Net Incm Rpt Qtr ($mil) = 98

Anl Net Incm this Yr/ Net Incm last Yr = 19.27

Cash Flow ($/sh) 12/2011 = 7.42

Cash Flow ($/sh) 12/2010 = 9.05

Cash Flow ($/sh) 12/2009 = 10.01

Div 5yr Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 16258

Sales ($mil) 12/2010 = 13339

Sales ($mil) 12/2009 = 12967

Dividend history

Div Yield = 4.95

Div Yld 5 Yr Avg 12/2011 = N/A

Div Yld 5 Yr Avg 09/2011 = 4.51

Annual Dividend 12/2011 = 2.2

Annual Dividend 12/2010 = 2.2

Forward Yield = 4.95

Div 5yr Growth 12/2011 = N/A

R-squared Div Growth 12/2011 = N/A

R-squared Div Growth 09/2011 = 0.48

Dividend sustainability

Payout Ratio 09/2011 = 0.64

Payout Ratio 06/2011 = 0.65

Payout Ratio 5 Yr Avg 12/2011 = N/A

Payout Ratio 5 Yr Avg 09/2011 = 0.56

Payout Ratio 5 Yr Avg 06/2011 = 0.55

Change in Payout Ratio = 0.09

Performance

% Ch Price 52 Wks Rel to S&P 500 = 15.93

Std Dev Target Price Est = 3.38

Avg EPS Surprise Last 4 Qtr = -2.24

EPS % Change F2/F1 = -5.8

Next 3-5 Yr Est EPS Gr rate = 1

Std Dev 3-5 Yr Est EPS Gr rate = N/A

EPS Gr Q(1)/Q(-3) = -108.45

5 Yr Hist EPS Gr 12/2011 = N/A

5 Yr Hist EPS Gr 09/2011 = -5.45

ROE 5 Yr Avg 12/2011 = N/A

ROE 5 Yr Avg 09/2011 = 13.49

ROE 5 Yr Avg 06/2011 = 13.64

Return on Investment 12/2011 = N/A

Return on Investment 09/2011 = 4.67

Return on Investment 06/2011 = 4.58

Debt/Tot Cap 5 Yr Avg 12/2011 = N/A

Debt/Tot Cap 5 Yr Avg 09/2011 = 53.98

Debt/Tot Cap 5 Yr Avg 06/2011 = 53.71

Current Ratio 12/2011 = N/A

Current Ratio 09/2011 = 0.69

Current Ratio 06/2011 = 0.74

Curr Ratio 5 Yr Avg = 0.57

Quick Ratio = 0.52

Cash Ratio = 0.15

Interest Coverage 12/2011 = N/A

Interest Coverage 09/2011 = 1.93

Interest Coverage 06/2011 = 4.07

Valuation

Book Value Qtr ($/sh) 12/2011 = N/A

Book Value Qtr ($/sh) 09/2011 = 31.8

Book Value Qtr ($/sh) 06/2011 = 31.12

Anl EPS before NRI 12/2007 = 4.2

Anl EPS before NRI 12/2008 = 4.43

Anl EPS before NRI 12/2009 = 3.75

Anl EPS before NRI 12/2010 = 3.62

Anl EPS before NRI 12/2011 = 3.62

Price/ Book = 1.4

Price/ Cash Flow = 6

Price/ Sales = 1.15

EV/EBITDA 12 Mo = 8.32

P/E/G F1 = 12.99

Q1 Std Dev/ Consensus = 0.17

R-squared EPS Growth 12/2011 = N/A

R-squared EPS Growth 09/2011 = 0.63

P/E F1/ LT EPS Gr = 12.99

Std Dev Cons Current Qtr = 0.13

Median Est Next Qtr = 0.67

# Anlst in Cons Q3 = 7

Company : Ppl Corp (NYSE:PPL)

Levered Free Cash Flow = 728.12M

Basic Key ratios

Percentage Held by Insiders = 0.74

Market Cap ($mil) = 16458

Number of Institutional Sellers 12 Weeks = N/A

3 Month % Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 1495

Net Income ($mil) 12/2010 = 938

Net Income ($mil) 12/2009 = 407

12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 59.38

Q Net Incm this Q/ same qtr yr ago = 27.89

EBITDA ($mil) 12/2011 = 4314

EBITDA ($mil) 12/2010 = 2612

EBITDA ($mil) 12/2009 = 1785

Net Incm Rpt Qtr ($mil) = 454

Anl Net Incm this Yr/ Net Incm last Yr = 59.38

Cash Flow ($/sh) 12/2011 = 4.71

Cash Flow ($/sh) 12/2010 = 4.42

Cash Flow ($/sh) 12/2009 = 4.24

Div 5yr Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 12737

Sales ($mil) 12/2010 = 8521

Sales ($mil) 12/2009 = 7556

Dividend history

Div Yield = 4.92

Div Yld 5 Yr Avg 12/2011 = N/A

Div Yld 5 Yr Avg 09/2011 = 4.12

Annual Dividend 12/2011 = 1.4

Annual Dividend 12/2010 = 1.4

Forward Yield = 5.06

Div 5yr Growth 12/2011 = N/A

R-squared Div Growth 12/2011 = N/A

R-squared Div Growth 09/2011 = 0.73

Dividend sustainability

Payout Ratio 09/2011 = 0.51

Payout Ratio 06/2011 = 0.48

Payout Ratio 5 Yr Avg 12/2011 = N/A

Payout Ratio 5 Yr Avg 09/2011 = 0.57

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 = 7.41

Std Dev Target Price Est = 1.56

Avg EPS Surprise Last 4 Qtr = 10.1

EPS % Change F2/F1 = 5.79

Next 3-5 Yr Est EPS Gr rate = N/A

Std Dev 3-5 Yr Est EPS Gr rate = N/A

EPS Gr Q(1)/Q(-3) = 115.48

5 Yr Hist EPS Gr 12/2011 = N/A

5 Yr Hist EPS Gr 09/2011 = 5.61

ROE 5 Yr Avg 12/2011 = N/A

ROE 5 Yr Avg 09/2011 = 15.63

ROE 5 Yr Avg 06/2011 = 15.78

Return on Investment 12/2011 = N/A

Return on Investment 09/2011 = 5.63

Return on Investment 06/2011 = 6.07

Debt/Tot Cap 5 Yr Avg 12/2011 = N/A

Debt/Tot Cap 5 Yr Avg 09/2011 = 56.95

Debt/Tot Cap 5 Yr Avg 06/2011 = 56.76

Current Ratio 12/2011 = N/A

Current Ratio 09/2011 = 1.22

Current Ratio 06/2011 = 1.19

Curr Ratio 5 Yr Avg = 1.25

Quick Ratio = 1.1

Cash Ratio = 0.94

Interest Coverage 12/2011 = N/A

Interest Coverage 09/2011 = 3.7

Interest Coverage 06/2011 = 3.33

Valuation

Book Value Qtr ($/sh) 12/2011 = N/A

Book Value Qtr ($/sh) 09/2011 = 19.19

Book Value Qtr ($/sh) 06/2011 = 19.24

Anl EPS before NRI 12/2007 = 2.6

Anl EPS before NRI 12/2008 = 2.02

Anl EPS before NRI 12/2009 = 1.96

Anl EPS before NRI 12/2010 = 3.13

Anl EPS before NRI 12/2011 = 2.73

Price/ Book = 1.48

Price/ Cash Flow = 6.04

Price/ Sales = 1.29

EV/EBITDA 12 Mo = 7.67

P/E/G F1 = N/A

Q1 Std Dev/ Consensus = 0.09

R-squared EPS Growth 12/2011 = N/A

R-squared EPS Growth 09/2011 = 0.24

P/E F1/ LT EPS Gr = N/A

Std Dev Cons Current Qtr = 0.06

Median Est Next Qtr = 0.4

# Anlst in Cons Q3 = 7

Company : Heinz (Hj) Co (NYSE:HNZ)

Levered Free Cash Flow = 629.19M

Basic Key ratios

Percentage Held by Insiders = 2.3

Market Cap ($mil) = 16966

Number of Institutional Sellers 12 Weeks = N/A

3 Month % Chg Short Interest = n/a

Growth

Net Income ($mil) 12/2011 = 990

Net Income ($mil) 12/2010 = 865

Net Income ($mil) 12/2009 = 923

12mo Net Incm this Q/ 12mo Net Incm 4Q's ago = 1.43

Q Net Incm this Q/ same qtr yr ago = 3.99

EBITDA ($mil) 12/2011 = 1948

EBITDA ($mil) 12/2010 = 1889

EBITDA ($mil) 12/2009 = 1941

Net Incm Rpt Qtr ($mil) = 285

Anl Net Incm this Yr/ Net Incm last Yr = 14.41

Cash Flow ($/sh) 12/2011 = 4.02

Cash Flow ($/sh) 12/2010 = 3.85

Cash Flow ($/sh) 12/2009 = 3.83

Div 5yr Growth 12/2011 = N/A

Sales ($mil) 12/2011 = 10707

Sales ($mil) 12/2010 = 10495

Sales ($mil) 12/2009 = 10148

Dividend history

Div Yield = 3.62

Div Yld 5 Yr Avg 12/2011 = N/A

Div Yld 5 Yr Avg 09/2011 = 3.72

Annual Dividend 12/2011 = 1.8

Annual Dividend 12/2010 = 1.68

Forward Yield = 3.62

Div 5yr Growth 12/2011 = N/A

R-squared Div Growth 12/2011 = N/A

R-squared Div Growth 09/2011 = 0.92

Dividend sustainability

Payout Ratio 09/2011 = 0.61

Payout Ratio 06/2011 = 0.62

Payout Ratio 5 Yr Avg 12/2011 = 0.6

Payout Ratio 5 Yr Avg 09/2011 = 0.6

Payout Ratio 5 Yr Avg 06/2011 = 0.6

Change in Payout Ratio = -0.01

Performance

% Ch Price 52 Wks Rel to S&P 500 = 4.02

Std Dev Target Price Est = 4.24

Avg EPS Surprise Last 4 Qtr = 3.56

EPS % Change F2/F1 = 8.4

Next 3-5 Yr Est EPS Gr rate = 8

Std Dev 3-5 Yr Est EPS Gr rate = N/A

EPS Gr Q(1)/Q(-3) = -113.1

5 Yr Hist EPS Gr 12/2011 = 5.42

5 Yr Hist EPS Gr 09/2011 = 5.55

ROE 5 Yr Avg 12/2011 = 45.55

ROE 5 Yr Avg 09/2011 = 45.65

ROE 5 Yr Avg 06/2011 = 45.61

Return on Investment 12/2011 = 15.04

Return on Investment 09/2011 = 14.95

Return on Investment 06/2011 = 15.45

Debt/Tot Cap 5 Yr Avg 12/2011 = 67.42

Debt/Tot Cap 5 Yr Avg 09/2011 = 67.86

Debt/Tot Cap 5 Yr Avg 06/2011 = 68.22

Current Ratio 12/2011 = 1.19

Current Ratio 09/2011 = 1.17

Current Ratio 06/2011 = 1.17

Curr Ratio 5 Yr Avg = 1.25

Quick Ratio = 0.55

Cash Ratio = 0.25

Interest Coverage 12/2011 = 5.86

Interest Coverage 09/2011 = 4.9

Interest Coverage 06/2011 = 5.31

Valuation

Book Value Qtr ($/sh) 12/2011 = 9.07

Book Value Qtr ($/sh) 09/2011 = 8.99

Book Value Qtr ($/sh) 06/2011 = 10.02

Anl EPS before NRI 12/2007 = 2.38

Anl EPS before NRI 12/2008 = 2.63

Anl EPS before NRI 12/2009 = 2.9

Anl EPS before NRI 12/2010 = 2.87

Anl EPS before NRI 12/2011 = 3.08

Price/ Book = 5.84

Price/ Cash Flow = 13.17

Price/ Sales = 1.48

EV/EBITDA 12 Mo = 10.42

P/E/G F1 = 1.99

Q1 Std Dev/ Consensus = 0.03

R-squared EPS Growth 12/2011 = 0.85

R-squared EPS Growth 09/2011 = 0.85

P/E F1/ LT EPS Gr = 1.99

Std Dev Cons Current Qtr = 0.02

Median Est Next Qtr = 0.83

# Anlst in Cons Q3 = 6

Conclusion

Long-term investors should wait for a strong pullback before committing new funds to this market.

EPS, EPS surprise, broker recommendations, and price and consensus charts sourced from zacks.com. Earnings estimates and growth rate charts for SQM sourced from dailyfinance.com. Free cash flow yield, income from cont operations, and revenue growth sourced from Ycharts.com.

Disclaimer: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--let the buyer beware--applies.

Source: A Look At 5 Solid Dividend Plays