3 S&P 500 Dividend Stocks With Strong Inventory And Receivable Trends

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Includes: BA, MUR, XOM
by: Kapitall

Do you consider a company's sales trends when evaluating stocks? Because many companies earn a majority of their profits through revenue, a sales analysis is an important part of almost any company's story.

To illustrate this, we ran a screen on dividend stocks of the S&P 500 for stocks with encouraging sales trends relative to inventory and accounts receivable.

We began by screening the S&P 500 for dividend stocks - those paying dividend yields above 2% and sustainable payout ratios below 50%.

We then compared growth in revenue to growth in inventory over the last year. We screened for stocks with positive sales trends, with faster growth in revenue than inventory over the last year. Since inventory represents the portion of goods not yet sold, faster growth in revenue than inventory is considered a good sign.

To screen for healthy liquidity, we also only focused on those companies with inventory declining as a percent of current assets.

We then screened for those stocks with strong sales trends, comparing growth in revenue to growth in accounts receivable. Since accounts receivable is the portion of revenue not yet received, and there is no guarantee the money will ever be received, the smaller the portion of revenue made up of receivables the healthier the company's revenue.

We screened for stocks seeing faster growth in revenue than accounts receivable year-over-year, as well as accounts receivable comprising a smaller portion of current assets over the same time period.

Do you think these companies have strong sales trends? Use this list as a starting point for your own analysis.

List sorted by increase in revenue over the last year.

1. Boeing Co. (NYSE:BA): Engages in the design, development, manufacture, sale, and support of commercial jetliners, military aircraft, satellites, missile defense, human space flight, and launch systems and services worldwide. Market cap at $51.8B, most recent closing price at $69.15.Dividend yield at 2.55%, payout ratio at 29.45%. Revenue grew by 30% during the most recent quarter ($19,383M vs. $14,910M y/y). Accounts receivable grew by 8.89% during the same time period ($6,847M vs. $6,288M y/y). Receivables, as a percentage of current assets, decreased from 15.33% to 13.66% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31). Inventory grew by 21.65% during the same time period ($32,738M vs. $26,912M y/y). Inventory, as a percentage of current assets, decreased from 65.62% to 65.3% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. Murphy Oil Corporation (NYSE:MUR): Engages in the exploration and production of oil and gas properties worldwide. Market cap at $8.99B, most recent closing price at $46.29.Dividend yield at 2.38%, payout ratio at 26.88%. Revenue grew by 11.53% during the most recent quarter ($6,994.52M vs. $6,271.67M y/y). Accounts receivable grew by -20.09% during the same time period ($1,485.06M vs. $1,858.53M y/y). Receivables, as a percentage of current assets, decreased from 47.39% to 39.03% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31). Inventory grew by -11.8% during the same time period ($661.68M vs. $750.18M y/y). Inventory, as a percentage of current assets, decreased from 19.13% to 17.39% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

3. Exxon Mobil Corporation (NYSE:XOM): Engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. Market cap at $380.97B, most recent closing price at $81.47.Dividend yield at 2.80%, payout ratio at 22.71%. Revenue grew by 8.81% during the most recent quarter ($124,053M vs. $114,004M y/y). Accounts receivable grew by 1.99% during the same time period ($35,844M vs. $35,146M y/y). Receivables, as a percentage of current assets, decreased from 48.8% to 47.06% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31). Inventory grew by -9.3% during the same time period ($14,749M vs. $16,262M y/y). Inventory, as a percentage of current assets, decreased from 22.58% to 19.37% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.