Interested in stocks paying dividend income? Do you value companies holding large amounts of cash? Do you prefer companies with strong profits? If yes, here are a few ideas to start your search.
The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.
The Quick ratio measures a company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well, due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue.
Return on Assets [ROA] illustrates how much a company is generating in earnings from its assets alone. This metric gives investors a picture of how profitable the company is relative to the assets in current possession. As also, it lets investors see how efficient and effective management is at generating earnings from the company's assets. While most management teams can probably make money by throwing money at an issue, very few can make very large profits with little investment.
We first looked for dividend stocks. Next, we then screened for businesses that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We next screened for businesses that have achieved strong bottom line profitability (Net Margin [TTM]>10%)(ROA [TTM]>10%). We did not screen out any market caps or sectors.
Do you think these stocks can offer attractive returns? Use our list along with your own analysis.
1) Agilent Technologies Inc. (A)
|Industry:||Scientific & Technical Instruments|
Agilent Technologies Inc. has a Dividend yield of 0.94% and Current Ratio of 3.35 and Quick Ratio of 2.80 and Net Margin of 15.58% and Return on Assets of 12.24%. The short interest was 1.63% as of 04/30/2012. Agilent Technologies, Inc. provides bio-analytical and electronic measurement solutions to the communications, electronics, life sciences, and chemical analysis industries worldwide.
The company's Electronic Measurement segment offers electronic measurement instruments and systems, and software design tools that are used in the design, development, manufacture, installation, deployment, and operation of electronics equipment and microscopy products. Its products consist of communications and general purpose test products.
2) ATRION Corp. (ATRI)
|Industry:||Medical Instruments & Supplies|
ATRION Corp. has a Dividend yield of 0.85% and Current Ratio of 8.34 and Quick Ratio of 5.89 and Net Margin of 22.12% and Return on Assets of 17.56%. The short interest was 2.48% as of 04/30/2012. Atrion Corporation develops and manufactures ophthalmology, cardiovascular, and fluid delivery devices primarily for medical applications in the United States and internationally.
The company's ophthalmic products comprise soft contact lens storage and disinfection cases; and LacriCATH line of balloon catheters used in the treatment of nasolacrimal duct obstruction in children and adults. Its cardiovascular products include MPS2 Myocardial Protection System that delivers essential fluids and medications to the heart during open-heart surgery; cardiac surgery vacuum relief valves; Retract-O-Tape silicone vessel loops for retracting and occluding vessels in minimally invasive surgical procedures; inflation devices for balloon catheter dilation, stent deployment, and fluid dispensing; and Clean-Cut rotating aortic punch and PerfectCut Aortotomy System, which are used in heart bypass surgery. The company's fluid delivery products comprise luer syringe check valves and one-way valves; tubing clamps; and specialized intravenous sets for use in anesthesia and oncology applications.
3) Allergan Inc. (AGN)
|Industry:||Drug Manufacturers - Other|
Allergan Inc. has a Dividend yield of 0.21% and Current Ratio of 4.24 and Quick Ratio of 3.98 and Net Margin of 17.31% and Return on Assets of 11.16%. The short interest was 1.25% as of 04/30/2012. Allergan, Inc. operates as a multi-specialty healthcare company primarily in the United States, Europe, Latin America, and the Asia Pacific. The company discovers, develops, and commercializes specialty pharmaceutical, biologics, medical device, and over-the-counter products for the ophthalmic, neurological, medical aesthetics, medical dermatological, breast aesthetics, obesity intervention, urological, and other specialty markets worldwide. It operates in two segments, Specialty Pharmaceuticals and Medical Devices.
4) ADTRAN Inc. (ADTN)
ADTRAN Inc. has a Dividend yield of 1.18% and Current Ratio of 5.50 and Quick Ratio of 4.16 and Net Margin of 17.09% and Return on Assets of 14.32%. The short interest was 9.67% as of 04/30/2012. ADTRAN, Inc. designs, manufactures, markets, and services communications network solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Its Carrier Networks division provides fiber and copper-based solutions for service providers to deliver voice, data, and video services to customers' premises and mobile network cell sites. Its products enable services, such as voice, VoIP, IP television, RF video, high speed Internet access, and data services based upon Ethernet, frame relay, TDM, and ATM networks, connecting the network with user components, such as switches, routers, gateways, integrated access devices (IADs), private branch exchanges (PBXs), and telephone key systems.
5) Apco Oil & Gas International Inc. (APAGF)
|Industry:||Independent Oil & Gas|
Apco Oil & Gas International Inc. has a Dividend yield of 0.19% and Current Ratio of 5.71 and Quick Ratio of 5.55 and Net Margin of 62.10% and Return on Assets of 22.85%. The short interest was 29.84% as of 04/30/2012. Apco Oil and Gas International Inc. engages in the exploration and production of oil and gas primarily in South America. The company has working interests in the Entre Lomas, Bajada del Palo, and Charco del Palenque concessions; and the Agua Amarga exploration permit in the Neuquen basin, Argentina. As of September 30, 2011, it had interests in eight oil and gas producing concessions and two exploration permits in Argentina.
6) Alliance Resource Partners LP (ARLP)
|Industry:||Industrial Metals & Minerals|
Alliance Resource Partners LP has a Dividend yield of 6.25% and Current Ratio of 2.38 and Quick Ratio of 2.21 and Net Margin of 21.12% and Return on Assets of 24.09%. The short interest was 0.56% as of 04/30/2012. Alliance Resource Partners, L.P. engages in the production and marketing of coal primarily to utilities and industrial users in the United States.
*Company profiles were sourced from Finviz. Financial data was sourced from Google Finance and Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.