Do you prefer stocks that pay back their investors with dividend income? Do you feel better knowing your favorite companies have enough cash to cover their operating expenses for a very long time? Looking for undervalued stocks? You might be interested in this list.
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 Price/Sales Ratio is a price-multiple valuation metric used to help identify if a firm is cheap by its twelve month trailing sales numbers. In the most basic terms it let's an investor know how much the investment community is willing to pay for every dollars worth of sales. A firm with a P/S ratio of one or lower would be viewed as cheap because investors are paying $1 or less for every dollars worth of a firm's sales. On the other hand, a firm is generally considered to be expensive when the P/S ratio is above three. These are general guidelines used by the investment community not hard rules to be clear. Price/Sales Ratio = Current Stock Price/Revenue (sales) per Share
The Price/Cash Flow Ratio is a price-multiple valuation metric that also measures a firm's future financial health. An advantage of using cash flow is that it removes non-cash factors, which helps provide a clearer picture of how much money the firm is taking in from a valuation standpoint. Price/Cash Flow Ratio = Current Stock Price/Cash Flow Per Share
We first looked for dividend stocks. We then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We then screened for businesses that are trading at a discount (P/S<1)(P/CFO<10). We did not screen out any market caps or sectors.
Do you think these stocks deserve to grow higher? Use this list as a starting-off point for your own analysis.
1) CSS Industries Inc. (NYSE:CSS)
|Industry:||Specialty Retail, Other|
CSS Industries Inc. has a Dividend yield of 3.06% and Current Ratio of 3.75 and Quick Ratio of 2.51 and Price/Sales Ratio of 0.49 and Price/Cash Flow Ratio of 18.17. The short interest was 2.01% as of 04/29/2012. CSS Industries, Inc., a consumer products company, engages in the design, manufacture, procurement, distribution, and sale of seasonal and occasion social expression products principally in the United States and Canada. Its seasonal and occasion products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative tissue paper, decorations, classroom exchange Valentines, decorative ribbons and bows, floral accessories, Halloween masks, costumes, make-up and novelties, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life's celebrations, as well as teachers' aids and other learning oriented products. The company offers its products under various brands, including Paper Magic, Berwick, Offray, Cleo, C.
2) Omnicare Inc. (NYSE:OCR)
Omnicare Inc. has a Dividend yield of 0.80% and Current Ratio of 4.25 and Quick Ratio of 3.48 and Price/Sales Ratio of 0.64 and Price/Cash Flow Ratio of 6.81. The short interest was 8.34% as of 04/29/2012. Omnicare, Inc. operates as a healthcare services company that specializes in the management of pharmaceutical care in the United States and Canada. It provides pharmaceuticals, and related pharmacy and ancillary services to long-term care facilities, as well as chronic care facilities and other settings. The company operates institutional pharmacy business serving skilled nursing facilities, assisted living facilities, independent living communities, hospitals, correctional facilities, and other healthcare service providers; and offers pharmacy consulting services, including monthly patient drug therapy evaluations, assistance in compliance with state and federal regulations, and provision of proprietary clinical and health management programs.
3) Bel Fuse Inc. (NASDAQ:BELFB)
Bel Fuse Inc. has a Dividend yield of 1.55% and Current Ratio of 4.90 and Quick Ratio of 3.64 and Price/Sales Ratio of 0.72 and Price/Cash Flow Ratio of 2.27. The short interest was 1.94% as of 04/29/2012. Bel Fuse Inc., together with its subsidiaries, engages in the design, manufacture, and sale of products used in local area networking, telecommunications, business equipment, and consumer electronic applications in North America, Europe, and Asia. It offers various magnetic products, including MagJack integrated connector modules that provide the signal conditioning, electromagnetic interference suppression, and signal isolation for networking, telecommunications, and broadband applications; diplexer and triplexer filters used in high speed, home networking applications that utilize excess bandwidth available on existing coax cabling; power transformer products comprising standard and custom designs for use in alarm, security, motion control, elevator, and medical products; and discrete magnetic components consisting of transformers and chokes for use in networking, telecommunications, and broadband applications. The company also offers modules, such as power conversion modules comprising standard and custom isolated and non-isolated DC-DC converters designed to power low voltage silicon devices; and integrated modules that condition, filter, and isolate the electronic signal to ensure accurate data/voice/video transmission, as well as circuit protection products, including board level fuses and polymeric positive temperature coefficient devices for use in televisions, consumer electronics, power supplies, computers, telephones, and networking equipment.
4) Cash America International, Inc. (NYSE:CSH)
Cash America International, Inc. has a Dividend yield of 0.30% and Current Ratio of 4.79 and Quick Ratio of 3.90 and Price/Sales Ratio of 0.89 and Price/Cash Flow Ratio of 21.99. The short interest was 14.10% as of 04/29/2012. Cash America International, Inc. provides specialty financial services to individuals in the United States and Mexico. The company operates in two segments, Retail Services and E-Commerce. The Retail Services segment provides pawn lending, consumer loans, and check cashing, as well as other ancillary services, such as money orders, wire transfers, and pre-paid debit cards.
*Company profiles were sourced from Finviz. Financial data was sourced from Finviz and Google Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.