4 Highly Liquid Dividend Stocks With Strong Sources Of Profitability

Do you prefer stocks paying part of their return in dividend income? For a closer look at interesting dividend stocks, we ran a screen. We began by screening for stocks paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened these names for those with high liquidity, with current ratios above 3. The current ratio is current assets/current liabilities, so ratios above 3 indicate the company has at least 3 times the liquid assets to cover their short-term liabilities. We then screened for strong profitability as well, by running DuPont analysis. DuPont analyzes profitability by breaking up return on equity (net income/equity) into three components: ROE = (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net Profit margin)*(Asset turnover)*(Leverage ratio) Because increases in net margin and asset turnover are considered good things, DuPont focuses on companies with these positive characteristics: Increasing ROE along with, Decreasing leverage, (i.e. decreasing.... Read more