To find solid investments that bring in additional income, many people turn to dividend stocks that have a track record of providing moderate to high yields. Because dividend investments tend to be for the long-term, selecting those with strong cash reserves and minimal debt are high priorities for investors, as those reserves and lack of debt highlight a company's fiscal responsibility and sustainability. With this in mind, we developed a list of dividend stocks with moderate or better yields that have a high level of liquidity and little debt. Use the data and graphs below to begin your own analysis.
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 dividend stocks. We then looked for companies that operate with little to no long term debt (Long Term D/E Ratio<.1). We then looked for companies with a large amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We did not screen out any market caps or sectors.
Do you think these stocks are worth more than the market currently says? Please use our list to assist with your own analysis.
1) CSS Industries Inc. (CSS)
|Industry||Specialty Retail, Other|
|Long Term Debt/Equity Ratio||0.00|
CSS Industries, Inc., a consumer products company, engages in the design, manufacture, procurement, distribution, and sale of seasonal and occasion social expression products principally to mass market retailers in the United States and Canada. Its seasonal and occasion products include decorative ribbons and bows, boxed greeting cards, gift tags, gift wrap, gift bags, gift boxes, gift card holders, decorative and waxed tissue paper, decorative films and foils, decorations, classroom exchange Valentines, floral accessories, Halloween masks, costumes, make-up and novelties, Easter egg dyes and novelties, craft and educational products, stickers, memory books, stationery, journals, notecards, infant and wedding photo albums, scrapbooks, and other gift items that commemorate life's celebrations, as well as teachers' aids and other learning oriented products.
The company offers its products under various brands, including Paper Magic, Berwick, Offray, C.R. Gibson, Markings, Creative Papers, Tapestry, Seastone, Dudley's, Don Post Studios, Eureka, Learning Playground, Stickerfitti, and iota. CSS Industries, Inc. sells its products to mass market, craft, specialty, and floral retailers; and wholesale distribution customers, as well as to the education market through mass market retailers, school supply distributors, and teachers' stores. It operates a showroom in Hong Kong. The company was founded in 1923 and is headquartered in Philadelphia, Pennsylvania.
2) American Science and Engineering, Inc. (ASEI)
|Industry||Security & Protection Services|
|Long Term Debt/Equity Ratio||0.02|
American Science and Engineering, Inc., together with its subsidiaries, develops, manufactures, markets, and sells X-ray inspection and other detection products for homeland security, force protection, and other critical defense applications in the United States and internationally. It offers cargo inspection systems comprising non-intrusive inspection products, which are primarily used for the screening of trucks, cars, cargo containers, pallets, and air cargo at border crossings, seaports, military bases, airports, and cargo and transportation hubs. The cargo inspection systems include OmniView gantry system, a cargo and vehicle inspection system; Z Portal system, a drive-through inspection system for scanning cargo and vehicles; Z Gantry system, a Z Backscatter inspection system for scanning cars, vans, trucks, and their cargo; Sentry Portal system, a drive through transmission X-ray inspection system; and MobileSearch High-Energy, a mobile inspection system for scanning trucks, cargo containers, and vehicles. The company also provides Z Backscatter systems, including Z Backscatter Van, a mobile X-ray screening system to produce photo-like images of plastic explosives or other anomalies; and ZBV Military Trailer, a rugged X-ray screening system built on military trailer.
In addition, it offers a parcel and personnel screening inspection system that includes Gemini system, a parcel and baggage inspection system; and SmartCheck system, a personnel screening system. Further, the company provides contract research and development programs for agencies of the United States government; and maintenance, warranty, engineering, and training services. It serves authorities responsible for port and border security, customs agencies, military organizations, high threat commercial and government facilities, aviation security agencies, and law enforcement agencies. The company was founded in 1958 and is headquartered in Billerica, Massachusetts.
3) Cato Corp. (CATO)
|Long Term Debt/Equity Ratio||0.00|
The Cato Corporation operates as a specialty retailer of fashion apparel and accessories in the southeastern United States. The company's stores offer a range of apparel and accessories, including dressy, career, and casual sportswear, dresses, coats, shoes, lingerie, costume jewelry, and handbags, as well as menswear and lines for kids and newborns. As of July 28, 2012, it operated 1,295 stores in 31 states. The company operates its stores primarily under the Cato, Cato Fashions, Cato Plus, It's Fashion, It's Fashion Metro, and Versona Accessories names. The Cato Corporation was founded in 1946 and is based in Charlotte, North Carolina.
4) Brooks Automation Inc. (BRKS)
|Industry||Semiconductor Equipment & Materials|
|Long Term Debt/Equity Ratio||0.00|
Brooks Automation, Inc. provides automation, vacuum, and instrumentation solutions for semiconductor manufacturing, life sciences, and clean energy markets worldwide. The company's Brooks Product Solutions segment provides a range of products critical to technology equipment productivity and availability. This segment's products include atmospheric and vacuum tool automation systems, atmospheric and vacuum robots and robotic modules, and cryogenic vacuum pumping, thermal management, and vacuum measurement solutions, which are used to create, measure, and control critical process vacuum applications.
Its Brooks Life Science Systems segment offers automated sample management systems, including automated sample storage, automated blood fractionation equipment, sample preparation and handling equipment, consumables, parts, and support services to various life science customers, including pharmaceutical companies, biotechnology companies, biobanks, national laboratories, research institutes, and research universities. The company's Brooks Global Services segment provides a range of support services, including on and off-site repair services, on and off-site diagnostic support services, and installation services to enable the customers to maximize process tool uptime and productivity. This segment also offers spare part support services to end-user customers. Brooks Automation, Inc. was founded in 1978 and is headquartered in Chelmsford, Massachusetts.
*Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 09/18/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.