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Do you prefer stocks that pay part of their returns in dividend income? If so, we ran a screen that might be just up your alley. We began by screening the S&P 500 for stocks paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened for those with strong upward momentum, trading within 5% of their 52-week highs.

Finally, we screened for strong sales trends by comparing 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 an encouraging sign.

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

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Tool provided by Kapitall (kapitall.com).

Do you think these stocks pay reliable dividend income? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. Time Warner Inc. (TWX): Operates as a media and entertainment company in the United States and internationally. Market cap at $35.99B, most recent closing price at $37.49. Dividend yield at 2.77%, payout ratio at 35.45%. The stock is trading 4.96% below its 52-week high. Revenue grew by 4.43% during the most recent quarter ($6,979M vs. $6,683M y/y). Inventory fell by 2% during the same time period ($1,909M vs. $1,948M y/y). Inventory, as a percentage of current assets, decreased from 16.37% to 15.53% during the most recent quarter (comparing 3 months ending 2012-03-31 to 3 months ending 2011-03-31).

2. The Home Depot, Inc. (HD): Operates as a home improvement retailer. Market cap at $78.B, most recent closing price at $50.96. Dividend yield at 2.28%, payout ratio at 40.60%. The stock is trading 4.64% below its 52-week high. Revenue grew by 5.86% during the most recent quarter ($17,808M vs. $16,823M y/y). Inventory fell by 0.96% during the same time period ($11,582M vs. $11,694M y/y). Inventory, as a percentage of current assets, decreased from 72.36% to 66.75% during the most recent quarter (comparing 13 weeks ending 2012-04-29 to 13 weeks ending 2011-05-01).

3. McCormick & Co. Inc. (MKC): Engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. Market cap at $7.96B, most recent closing price at $59.85. Dividend yield at 2.07%, payout ratio at 42.42%. The stock is trading 3.96% below its 52-week high. Revenue grew by 11.35% during the most recent quarter ($984M vs. $883.7M y/y). Inventory grew by 5.84% during the same time period ($611M vs. $577.3M y/y). Inventory, as a percentage of current assets, decreased from 53.47% to 52.35% during the most recent quarter (comparing 3 months ending 2012-05-31 to 3 months ending 2011-05-31).

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

Source: 3 S&P 500 Dividend Stocks With Strong Sales Trends Trading Near Highs