Interested in following smaller companies? Interested in basic materials stocks? Interested in stocks paying dividend income, but don't know where to start? In search of companies that can manage their debt well? If so, here are some ideas to start your stock search.
The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.
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).
We first looked for small cap basic materials dividend stocks. Next, we then screened for businesses that have maintained a sound capital structure (D/E Ratio<.3). We then looked for companies that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2).
Do you think these small-cap stocks have what it takes to grow? Use our list to help with your own analysis.
1) Gold Resource Corp (NYSEMKT:GORO)
Gold Resource Corp has a dividend yield of 2.21% and Debt/Equity Ratio of 0.00 and Current Ratio of 2.97 and Quick Ratio of 2.83. The short interest was 13.91% as of 05/01/2012. Gold Resource Corporation, an exploration stage company, engages in the exploration for and production of gold and silver in Mexico. It also explores copper, lead, and zinc ores. The company holds a 100% interest in six properties, including the El Aguila Project, the El Rey property, the Las Margaritas property, the Solaga property, the Alta Gracia property, and the El Chamizo property located in southern State of Oaxaca.
2) Hecla Mining Co. (NYSE:HL)
Hecla Mining Co. has a dividend yield of 1.17% and Debt/Equity Ratio of 0.01 and Current Ratio of 3.38 and Quick Ratio of 3.14. The short interest was 9.21% as of 05/01/2012. Hecla Mining Company, together with its subsidiaries, discovers, acquires, develops, produces, and markets precious and base metals worldwide. It offers gold and silver to precious metals traders; and lead, zinc, and bulk concentrates to custom smelters. The company has two operating mines and exploration properties that include the Greens Creek mine located in Alaska and the Lucky Friday mine located in northern Idaho. Hecla Mining Company was founded in 1891 and is based in Coeur d'Alene, Idaho.
3) Globe Specialty Metals, Inc. (NASDAQ:GSM)
|Industry:||Industrial Metals & Minerals|
Globe Specialty Metals, Inc. has a dividend yield of 1.50% and Debt/Equity Ratio of 0.21 and Current Ratio of 3.70 and Quick Ratio of 2.39. The short interest was 5.66% as of 05/01/2012. Globe Specialty Metals, Inc., together with its subsidiaries, produces and sells silicon metal and silicon-based alloys in North America, Europe, South America, and Asia. The company primarily offers silicon metal that is used as a raw material for silicone compounds, aluminum, and polysilicon. It also produces silicon-based alloys, such as ferrosilicon; magnesium-ferrosilicon-based alloys known as nodularizers; ferrosilicon-based alloys known as inoculants; calcium silicon alloys; and cored-wire silicon-based alloy products, as well as carbon electrodes, silica fume, and fines.
4) Gulf Island Fabrication Inc. (NASDAQ:GIFI)
|Industry:||Oil & Gas Equipment & Services|
Gulf Island Fabrication Inc. has a dividend yield of 1.43% and Debt/Equity Ratio of 0.00 and Current Ratio of 2.34 and Quick Ratio of 2.26. The short interest was 3.80% as of 05/01/2012. Gulf Island Fabrication, Inc., through its subsidiaries, operates as a fabricator of offshore drilling and production platforms, hull and deck sections of floating production platforms, and other specialized structures used in the development and production of offshore crude oil and natural gas reserves. The company fabricates jackets and deck sections of fixed production platforms; hull, tendon, and/or deck sections of floating production platforms, such as tension leg platforms (TLP), floating production storage and offloading vessels, minimum deepwater operating concepts, and SPARs; piles, wellhead protectors, and subsea templates; offshore living quarters and various other types of steel structures; water towboats; barges; lift boats; offshore support vessels; and mid-body sections for offshore supply vessels, as well as produces and repairs pressure vessels used in the oil and gas industry. It also fabricates piles and other rolled goods; templates; bridges for connecting offshore platforms; wellhead protectors; and various production, processing, compressor, and utility modules and other structures used in offshore oil and gas production and development activities.
5) FutureFuel Corp. (NYSE:FF)
|Industry:||Chemicals - Major Diversified|
FutureFuel Corp. has a dividend yield of 4.07% and Debt/Equity Ratio of 0.00 and Current Ratio of 6.77 and Quick Ratio of 5.17. The short interest was 2.78% as of 05/01/2012. FutureFuel Corp., through its subsidiary, FutureFuel Chemical Company, engages in the manufacture and sale of specialty chemicals and bio-based products primarily in the United States. The company operates in two segments, Chemicals and Biofuels. The Chemicals segment provides custom chemical manufacturing services for specific customers, such as bleach activators for detergent and consumer products manufacturers; proprietary herbicide and intermediates for life sciences companies; agrochemicals; and industrial and consumer products, such as cosmetics and personal care products, ink colorants, adhesion promoters, polymer additives, polymer and specialty dyes, specialty polymers, photographic and imaging chemicals, and food additives.
6) Minerals Technologies Inc. (NYSE:MTX)
Minerals Technologies Inc. has a dividend yield of 0.30% and Debt/Equity Ratio of 0.13 and Current Ratio of 3.98 and Quick Ratio of 3.48. The short interest was 2.60% as of 05/01/2012. Minerals Technologies Inc., a resource and technology based company, produces and markets a range of specialty mineral, mineral-based, and synthetic mineral products; and supporting systems and services worldwide. It operates in two segments, Specialty Minerals and Refractories. The Specialty Minerals segment produces and sells precipitated calcium carbonate, a synthetic mineral product; and quicklime, a processed mineral product.
*Company profiles were sourced from Finviz. Financial data was sourced from Yahoo Finance.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.