Do you like being able to rely on a stock's dividend? For ideas on how to start your own dividend search, we ran a screen.
We began by screening for "dividend champion" stocks, those listed by DRiP Investing as those that have consistently increased their dividends over the last 25 years. We also screened for those paying dividend yields above 2% and sustainable payout ratios below 50%.
Then finally we 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.
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Do you think these stocks pay reliable dividends? Use this list as a starting point for your own analysis.
List sorted by increase in revenue over the last year.
1. Exxon Mobil Corporation (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 $383.12B, most recent closing price at $81.93. Dividend yield at 2.78%, 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).
2. Nacco Industries Inc. (NC): Engages in lift trucks, small appliances, specialty retail, and mining businesses primarily in the Americas, Europe, and the Asia-Pacific. Market cap at $901.42M, most recent closing price at $107.44. Dividend yield at 2.04%, payout ratio at 14.38%. Revenue grew by 7.74% during the most recent quarter ($803.2M vs. $745.5M y/y). Accounts receivable grew by -4.36% during the same time period ($445.4M vs. $465.7M y/y). Receivables, as a percentage of current assets, decreased from 36.29% to 33.2% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).
3. Archer Daniels Midland Company (ADM): Procures, transports, stores, processes, and merchandises agricultural commodities and products in the United States and internationally. Market cap at $21.4B, most recent closing price at $32.50. Dividend yield at 2.15%, payout ratio at 33.41%. Revenue grew by 5.37% during the most recent quarter ($21,155M vs. $20,077M y/y). Accounts receivable grew by -70.48% during the same time period ($3,078M vs. $10,428M y/y). Receivables, as a percentage of current assets, decreased from 35.65% to 11.31% 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.
