Do you prefer stocks with high dividend yield? Do you look for companies with low debt? Do you prefer companies that can manage their long term debt? Do you feel better knowing your favorite companies have enough cash to cover their operating expenses for a very long time? If so, we ran a screen keeping this idea in mind.
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 Long Term Debt/Equity Ratio is a variation of the traditional debt-to-equity ratio; this value computes the proportion of a company's long-term debt compared to its available capital. By using this ratio, investors can identify the amount of leverage utilized by a specific company and compare it to others to help analyze the company's risk exposure. Generally, companies that finance a greater portion of their capital via debt are considered riskier than those with lower leverage ratios.
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 stocks that have a high dividend yield (Div. Yield > 5%). We then looked for businesses that operate with little to no debt (D/E Ratio<.3). We next screened for businesses that operate with little to no long term debt (Long Term D/E Ratio<.3). From here, we then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps or sectors.
Do you think these stocks have a positive future in store? Use this list as a starting-off point for your own analysis.
1) Communications Systems Inc. (JCS)
Communications Systems Inc. has a Dividend Yield of 6.03% and Payout Ratio of 52.07% and Debt/Equity Ratio of 0.02 and Long Term Debt/Equity Ratio of 0.02 and Current Ratio of 5.85 and Quick Ratio of 4.16. The short interest was 2.72% as of 05/15/2012. Communications Systems, Inc., together with its subsidiaries, manufactures and sells modular connecting and wiring devices, digital subscriber line filters, structured wiring systems, and media and rate conversion products primarily in North America, Europe, the Middle East, and Africa. The company's Suttle segment manufactures and markets copper and fiber connectivity systems, enclosure systems, XDSL filters and splitters, and active technologies for voice, data, and video communications under the Suttle brand name; and residential structured wiring products under the SOHO Access brand name. This segment offers its products directly and through distributors to communication companies, smaller telephone companies, electrical/low voltage contractors, home builders, cable customers, and original equipment manufacturers.
2) RF Industries Ltd. (RFIL)
RF Industries Ltd. has a Dividend Yield of 5.70% and Payout Ratio of 516.55% and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00 and Current Ratio of 6.40 and Quick Ratio of 3.85. The short interest was 0.15% as of 05/15/2012. RF Industries, Ltd. provides interconnect products and systems for radio frequency (RF) communications devices and wireless digital transmission systems in the United States and internationally. Its Connector and Cable Assembly division designs, manufactures, and distributes coaxial connectors and cable assemblies that are integrated with coaxial connectors. The company's Aviel Electronics division engages in the design, manufacture, and distribution of specialty and custom RF connectors primarily for aerospace and military customers.
3) PetMed Express Inc. (PETS)
PetMed Express Inc. has a Dividend Yield of 5.28% and Payout Ratio of 62.82% and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00 and Current Ratio of 10.11 and Quick Ratio of 6.95. The short interest was 21.58% as of 05/15/2012. PetMed Express, Inc., doing business as 1-800-PetMeds, operates a pet pharmacy in the United States. It markets non-prescription and prescription pet medications; and other health products for dogs and cats, as well as direct to consumers. The company's non-prescription medications include flea and tick control products, bone and joint care products, vitamins and nutritional supplements, and hygiene products.
4) Rimage Corp. (RIMG)
|Industry:||Data Storage Devices|
Rimage Corp. has a Dividend Yield of 8.17% and Payout Ratio of - and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00 and Current Ratio of 5.28 and Quick Ratio of 4.87. The short interest was 5.20% as of 05/15/2012. Rimage Corporation provides disc publishing and virtual publishing solutions that enable businesses to deliver digital content to their customers and employees worldwide. Its solutions enable delivery of videos, documents, audio files, and images. The company's digital publishing solutions archive, distribute, and protect content on CDs, DVDs, and Blu-Ray Discs. It also offers a video platform, which captures, manages, and distributes live and on-demand content.
5) Collectors Universe Inc. (CLCT)
Collectors Universe Inc. has a Dividend Yield of 8.53% and Payout Ratio of 197.58% and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00 and Current Ratio of 3.05 and Quick Ratio of 2.79. The short interest was 0.25% as of 05/15/2012. Collectors Universe, Inc. provides authentication and grading services to dealers and collectors of high-value coins, trading cards, event tickets, autographs, memorabilia, and stamps in the United States. It offers authentication and grading services for coins under the Professional Coin Grading Service brand name; sports and trading cards under the Professional Sports Authenticator (PSA) brand name; vintage autographs and memorabilia under the PSA/DNA authentication services brand name; and stamps under the Professional Stamp Experts brand name. The company also publishes authoritative price guides, rarity reports, and other collectibles data to provide collectors with information.
6) Qualstar Corp. (QBAK)
Qualstar Corp. has a Dividend Yield of 12.31% and Payout Ratio of - and Debt/Equity Ratio of 0.00 and Long Term Debt/Equity Ratio of 0.00 and Current Ratio of 6.79 and Quick Ratio of 4.80. The short interest was 0.04% as of 05/15/2012. Qualstar Corporation designs, develops, manufactures, and sells automated magnetic tape libraries used to store, retrieve, and manage electronic data primarily in the network computing environments worldwide. Its tape libraries consist of cartridge tape drives, tape cartridges, and robotics to move the cartridges from their storage locations to the tape drives under software control. The tape libraries provide data storage solutions for organizations requiring backup, recovery, and archival storage of critical electronic information. The company also offers ancillary products related to its tape libraries, such as tape media, tape magazines, cables, bar code labels, and internal equipment racks.
*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.