5 Cash Heavy Mid-Cap Consumer Stocks With Manageable Debt Ratios

by: ZetaKap

Are you looking for mid-sized companies that still have room to grow? Interested in gaining exposure to consumer companies? Do you value companies holding large amounts of cash? Interested in companies with minimal debt? Interested in companies with minimal long-term debt? Keeping this idea in mind, we ran a screen you might be interested in.

The Current ratio is a liquidity ratio used to determine a company's financial health. This 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).

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.

We first looked for mid-cap consumer stocks. We next screened for businesses that have a substantial amount of cash on hand (Current Ratio>2)(Quick Ratio>2). We then screened for businesses that operate with little to no debt (D/E Ratio<.3). We then screened for businesses that have maintained a sound long-term capital structure (Long-Term D/E Ratio<.3).

Do you think these mid-cap stocks have a strong outlook? Use our list to help with your own analysis.

1) Carter's, Inc. (NYSE:CRI)

Sector: Consumer Goods
Industry: Textile - Apparel Clothing
Market Cap: $3.01B
Beta: 0.75

Carter's, Inc. has a Current Ratio of 6.60, Quick Ratio of 4.36, Debt/Equity Ratio of 0.28 and Long-Term Debt/Equity Ratio of 0.28. The short interest was 6.09% as of 05/16/2012. Carter's, Inc., together with its subsidiaries, designs, sources, and markets branded children's wear. The company provides products under the Carter's, Child of Mine, Just One You, Precious Firsts, OshKosh, and related brand names.

Its Carter's brand baby products include bodysuits, pants, undershirts, towels, washcloths, receiving blankets, layette gowns, bibs, caps, and booties; play-clothes products consist of knit and woven cotton apparel; sleepwear products comprise pajamas and blanket sleepers; and other products consist of bedding, outerwear, swimwear, shoes, socks, diaper bags, gift sets, toys, and hair accessories.

2) Gentex Corp. (NASDAQ:GNTX)

Sector: Consumer Goods
Industry: Auto Parts
Market Cap: $3.22B
Beta: 1.49

Gentex Corp. has a Current Ratio of 6.04, Quick Ratio of 4.50, Debt/Equity Ratio of 0.00 and Long-Term Debt/Equity Ratio of 0.00. The short interest was 4.69% as of 05/16/2012. Gentex Corporation designs, develops, manufactures, and markets electro-optical products for the automotive, commercial building, and aircraft industries primarily in the United States, Germany, and Japan. It offers automotive mirrors, including automatic-dimming rear-view mirrors, such as interior auto-dimming mirrors and exterior auto-dimming mirror sub-assemblies; and non-automatic-dimming rear-view mirrors with electronic features.

The company also provides fire protection products, which include smoke alarms and smoke detectors combined with various models of signaling appliances for office buildings, hotels, motels, military bases, college dormitories, nursing homes, and other commercial establishments; and single-station alarms for commercial and residential applications. In addition, it offers variable dimmable windows to aircraft manufacturers.

3) Wolverine World Wide Inc. (NYSE:WWW)

Sector: Consumer Goods
Industry: Textile - Apparel Footwear & Accessories
Market Cap: $2.08B
Beta: 1.05

Wolverine World Wide Inc. has a Current Ratio of 3.47, Quick Ratio of 2.14, Debt/Equity Ratio of 0.12 and Long Term Debt/Equity Ratio of 0.00. The short interest was 5.47% as of 05/16/2012. Wolverine World Wide, Inc. designs, manufactures, sources, markets, licenses, and distributes branded footwear, apparel, and accessories. It offers industrial work shoes, boots, uniform shoes, outdoor sports footwear, rugged casual footwear, lifestyle footwear, sandals, and closed-toe products. It also provides outdoor apparel, and work and rugged casual apparel; and accessories, such as packs, bags, and luggage, as well as eye-wear, gloves, handbags, socks, watches, and plush toys.

4) Under Armour, Inc. (NYSE:UA)

Sector: Consumer Goods
Industry: Textile - Apparel Clothing
Market Cap: $4.93B
Beta: 1.57

Under Armour, Inc. has a Current Ratio of 3.80, Quick Ratio of 2.02, Debt/Equity Ratio of 0.11 and Long-Term Debt/Equity Ratio of 0.05. The short interest was 12.90% as of 05/16/2012. Under Armour, Inc. engages in the design, development, marketing, and distribution of apparel, footwear, and accessories for men, women, and youth worldwide.

The company offers its apparel in three fit types: compression, fitted, and loose that are designed to be worn in hot, cold, and changing temperatures. Its footwear products include football, baseball, lacrosse, softball and soccer cleats, as well as slides, performance training footwear, running footwear, basketball footwear, and hunting boots for athletes.

5) Deckers Outdoor Corp. (NASDAQ:DECK)

Sector: Consumer Goods
Industry: Textile - Apparel Footwear & Accessories
Market Cap: $2.07B
Beta: 1.47

Deckers Outdoor Corp. has a Current Ratio of 6.81, Quick Ratio of 4.62, Debt/Equity Ratio of 0.00 and Long-Term Debt/Equity Ratio of 0.00. The short interest was 21.79% as of 05/16/2012. Deckers Outdoor Corporation engages in the design, manufacture, and marketing of footwear and accessories for outdoor activities and casual lifestyle use for men, women, and children.

The company offers luxury footwear, handbags, apparel, and cold weather accessories under the UGG brand name; open and closed-toe outdoor lifestyle footwear, multi-sport shoes, light hiking shoes, amphibious footwear, and rugged outdoor travel shoes under the Teva brand name; action sport footwear under the Sanuk brand name; high-end casual footwear for men and women under the TSUBO brand name; outdoor performance and lifestyle footwear under the Ahnu brand name; and work footwear under the MOZO brand name.

The company sells its products primarily to specialty retailers, department stores, outdoor retailers, sporting goods retailers, shoe stores, and online retailers. Deckers Outdoor Corporation also sells its products directly to end-user consumers through its Websites, call centers, retail concept stores, and retail outlet stores, as well as through retailers in the United States.

*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.