Are you looking for mid-sized companies that still have room to grow? Interested in finding stocks that pay reliable dividends? Do you prefer companies with strong profits? Interested in companies with high liquidity? For ideas on how to go about your analysis, here is a list you might be interested in.
The Operating Profit Margin is a profitability ratio that measures the effectiveness of the company's operating efficiency. This metric allows investors to see how much profit is left after all variable costs are covered. If the company's margin is increasing over time, this means that it's earning more per dollar of sales. Finding trends in the Operating Profit Margin helps investors identify companies that are improving profitability over time and managing the economic landscape better than competitors.
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
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 mid-cap dividend stocks. From here, we then looked for companies with strong profit margins (1-year operating margin>15%)(Net Margin [TTM]>10%). We then looked for businesses with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We did not screen out any sectors.
Do you think these mid-cap stocks are undervalued and have room to trade higher? Use our screened list as a starting point for your own analysis.
1) International Game Technology (NYSE:IGT)
|Industry:||Multimedia & Graphics Software|
International Game Technology has a Dividend yield of 1.54% and Operating Profit Margin of 23.54% and Net Margin of 13.12% and Current Ratio of 2.16 and Quick Ratio of 2.00. The short interest was 2.72% as of 05/01/2012. International Game Technology engages in the design, development, manufacture, and marketing of electronic gaming equipment and systems worldwide. The company offers casino-style slot machines that determine the game play outcome at the machine; wide area progressive jackpot systems with linked machines across various casinos; and central determination system machines connected to a central server, which determines the game outcome, encompassing video lottery terminals used primarily in government-sponsored applications and electronic or video bingo machines. Its systems products include infrastructure and applications for casino management, customer relationship management (CRM), server-based games, and player management.
2) Albemarle Corp. (NYSE:ALB)
Albemarle Corp. has a Dividend yield of 1.23% and Operating Profit Margin of 20.58% and Net Margin of 14.68% and Current Ratio of 3.39 and Quick Ratio of 2.33. The short interest was 2.03% as of 05/01/2012. Albemarle Corporation develops, manufactures, and markets engineered specialty chemicals. The company's Polymer Solutions segment provides brominated, mineral, and phosphorus based flame retardants used in plastic enclosures for consumer electronics, printed circuit boards, wire and cable, electrical connectors, textiles, foam insulation, and foam seating in furniture and automobiles; and plastic and other additives, such as curatives, antioxidants, and stabilizers. Its Catalysts segment offers refinery catalysts, including hydroprocessing catalysts, fluidized catalytic cracking catalysts, and additives; organometallic co-catalysts, and metallocene components and co-catalysts for the manufacture of commodity and specialty plastics used in packaging, non-packaging, films, and injection molding; electronic materials, such as high purity metal organic products used in the production of light emitting diodes, as well as other products used in the production of solar cells; and chemical catalysts used in the production of ethylene dichloride and methylamines. The company's Fine Chemistry segment provides elemental bromine, alkyl bromides, inorganic bromides, brominated powdered activated carbon, and bromine fine chemicals used in chemical synthesis, oil and gas well drilling and completion fluids, mercury control, paper manufacturing, water purification, and beef and poultry processing.
3) KLA-Tencor Corporation (NASDAQ:KLAC)
|Industry:||Semiconductor Equipment & Materials|
KLA-Tencor Corporation has a Dividend yield of 2.69% and Operating Profit Margin of 33.79% and Net Margin of 23.93% and Current Ratio of 4.52 and Quick Ratio of 3.75. The short interest was 3.88% as of 05/01/2012. KLA-Tencor Corporation designs, manufactures, and markets process control and yield management solutions for the semiconductor and related nanoelectronics industries. It offers equipment comprising wafer and integrated circuit (IC) defect monitoring, review, and classification; reticle defect inspection and metrology; packaging and interconnect inspection; critical dimension metrology; pattern overlay metrology; film thickness, surface topography, and composition measurements; measurement of in-chamber process conditions, wafer shape, and stress metrology; computational lithography tools; and yield and fab-wide data management and analysis systems. The company also provides products that serve the high brightness light emitting diode, data storage, and photovoltaic industries, as well as general materials research.
4) Graco Inc. (NYSE:GGG)
Graco Inc. has a Dividend yield of 1.69% and Operating Profit Margin of 24.18% and Net Margin of 15.41% and Current Ratio of 4.73 and Quick Ratio of 3.91. The short interest was 1.48% as of 05/01/2012. Graco Inc. designs, manufactures, and markets systems and equipment to pump, meter, mix, and dispense various fluids and semi-solids worldwide. It operates in three segments: Industrial, Contractor, and Lubrication. The Industrial segment provides equipment to apply paint and other coatings to motor vehicles, appliances, furniture, and other industrial and consumer products; and process pump equipment that move and dispense chemicals, and liquid and semi-solid foods.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.