7 Dividend Champions with Encouraging Accounting Trends

Do you consider a stock’s sales trends when comparing names? For ideas on how to start your own sales analysis, we ran a screen.

We began by screening for “dividend champion” stocks, 105 names 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 1%.

We then 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.

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.

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. List Average 1-Year Return: 24%

1. American States Water Company (AWR, Earnings, Analysts, Financials): Provides water, electric, and contracted services in the United States. Market cap at $824.56M, most recent closing price at $43.72. The stock has been raising its dividend for 58 years. Current yield: 3.25%.

Revenue grew by 4.08% during the most recent quarter ($114.31M vs. $109.83M y/y). Accounts receivable grew by -15.12% during the same time period ($47.6M vs. $56.08M y/y). Receivables, as a percentage of current assets, decreased from 32.57% to 27.07% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). Revenue grew by 4.08% during the most recent quarter ($114.31M vs. $109.83M y/y). Inventory grew by -11.68% during the same time period ($28.81M vs. $32.62M y/y). Inventory, as a percentage of current assets, decreased from 18.95% to 16.38% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

2. Exxon Mobil Corporation (XOM, Earnings, Analysts, Financials): 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 $424.3B, most recent closing price at $91.92. The stock has been raising its dividend for 30 years. Current yield: 2.61%.

Revenue grew by 1.5% during the most recent quarter ($127,363M vs. $125,486M y/y). Accounts receivable grew by -4.5% during the same time period ($33,741M vs. $35,331M y/y). Receivables, as a percentage of current assets, decreased from 48.86% to 46.35% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). Revenue grew by 1.5% during the most recent quarter ($127,363M vs. $125,486M y/y). Inventory grew by -20.42% during the same time period ($15,158M vs. $19,048M y/y). Inventory, as a percentage of current assets, decreased from 26.34% to 20.82% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

3. Becton, Dickinson and Company (BDX, Earnings, Analysts, Financials): Develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. Market cap at $15.83B, most recent closing price at $79.32. The stock has been raising its dividend for 40 years. Current yield: 2.36%.

Revenue grew by 1.47% during the most recent quarter ($1,980.53M vs. $1,951.89M y/y). Accounts receivable grew by -7.19% during the same time period ($1,160.34M vs. $1,250.19M y/y). Receivables, as a percentage of current assets, decreased from 24.64% to 21.96% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). Revenue grew by 1.47% during the most recent quarter ($1,980.53M vs. $1,951.89M y/y). Inventory grew by -6.91% during the same time period ($1,239.12M vs. $1,331.1M y/y). Inventory, as a percentage of current assets, decreased from 26.24% to 23.45% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

4. Colgate-Palmolive Co. (CL, Earnings, Analysts, Financials): Together with its subsidiaries, manufactures and markets consumer products worldwide. Market cap at $50.51B, most recent closing price at $106.53. The stock has been raising its dividend for 49 years. Current yield: 2.33%.

Revenue grew by 1.96% during the most recent quarter ($4,267M vs. $4,185M y/y). Accounts receivable grew by -1.87% during the same time period ($1,785M vs. $1,819M y/y). Receivables, as a percentage of current assets, decreased from 40.69% to 36.92% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30). Revenue grew by 1.96% during the most recent quarter ($4,267M vs. $4,185M y/y). Inventory grew by -3.46% during the same time period ($1,368M vs. $1,417M y/y). Inventory, as a percentage of current assets, decreased from 31.7% to 28.29% during the most recent quarter (comparing 3 months ending 2012-06-30 to 3 months ending 2011-06-30).

5. Target Corp. (TGT, Earnings, Analysts, Financials): Operates general merchandise stores in the United States. Market cap at $42.86B, most recent closing price at $65.44. The stock has been raising its dividend for 45 years. Current yield: 2.24%.

Revenue grew by 3.32% during the most recent quarter ($16,779M vs. $16,240M y/y). Accounts receivable grew by -3.18% during the same time period ($5,540M vs. $5,722M y/y). Receivables, as a percentage of current assets, decreased from 35.63% to 33.75% during the most recent quarter (comparing 13 weeks ending 2012-07-28 to 13 weeks ending 2011-07-30). Revenue grew by 3.32% during the most recent quarter ($16,779M vs. $16,240M y/y). Inventory grew by -2.44% during the same time period ($7,733M vs. $7,926M y/y). Inventory, as a percentage of current assets, decreased from 49.36% to 47.11% during the most recent quarter (comparing 13 weeks ending 2012-07-28 to 13 weeks ending 2011-07-30).

6. Tootsie Roll Industries Inc. (TR, Earnings, Analysts, Financials): Engages in the manufacture and sale of confectionery products primarily in the United States, Canada, and Mexico. Market cap at $1.52B, most recent closing price at $26.80. The stock has been raising its dividend for 47 years. Current yield: 1.26%.

Revenue grew by 3.14% during the most recent quarter ($109.14M vs. $105.82M y/y). Accounts receivable grew by -12.53% during the same time period ($29.66M vs. $33.91M y/y). Receivables, as a percentage of current assets, decreased from 16.99% to 14.03% during the most recent quarter (comparing 13 weeks ending 2012-06-30 to 13 weeks ending 2011-07-02). Revenue grew by 3.14% during the most recent quarter ($109.14M vs. $105.82M y/y). Inventory grew by -8.84% during the same time period ($95.98M vs. $105.29M y/y). Inventory, as a percentage of current assets, decreased from 52.75% to 45.39% during the most recent quarter (comparing 13 weeks ending 2012-06-30 to 13 weeks ending 2011-07-02).

7. Donaldson Company, Inc. (DCI, Earnings, Analysts, Financials): Engages in the manufacture and sale of filtration systems and replacement parts worldwide. Market cap at $5.24B, most recent closing price at $35.19%. The stock has been raising its dividend for 26 years. Current yield: 1.02%.

Revenue grew by 5.02% during the most recent quarter ($656.83M vs. $625.45M y/y). Accounts receivable grew by -1.55% during the same time period ($438.8M vs. $445.7M y/y). Receivables, as a percentage of current assets, decreased from 41.79% to 40.42% during the most recent quarter (comparing 3 months ending 2012-07-31 to 3 months ending 2011-07-31). Revenue grew by 5.02% during the most recent quarter ($656.83M vs. $625.45M y/y). Inventory grew by -5.66% during the same time period ($256.12M vs. $271.48M y/y). Inventory, as a percentage of current assets, decreased from 25.45% to 23.59% during the most recent quarter (comparing 3 months ending 2012-07-31 to 3 months ending 2011-07-31).

Use Kapitall’s Tools: Looking for ways to analyze this list?

Use this article snapshot as a launch pad (click here for help): Simply click on the links, and use Kapitall’s tab navigation to browse through the data…

Analyze These Ideas: Getting Started

• Read descriptions for all companies mentioned
• Access a performance overview for all stocks in the list
• Compare analyst ratings for the companies mentioned
• Compare analyst ratings to annual returns for stocks mentioned
• Real-Time Opinion: Scan the latest tweets about these companies (feed will open in a new window)

Dig Deeper: Access Company Snapshots, Charts, Filings

• American States Water Company (AWR, Chart, Download SEC Filings)
• Exxon Mobil Corporation (XOM, Chart, Download SEC Filings)
• Becton, Dickinson and Company (BDX, Chart, Download SEC Filings)
• Colgate-Palmolive Co. (CL, Chart, Download SEC Filings)
• Target Corp. (TGT, Chart, Download SEC Filings)
• Tootsie Roll Industries Inc. (TR, Chart, Download SEC Filings)
• Donaldson Company, Inc. (DCI, Chart, Download SEC Filings)

New to Kapitall?

1. New to the site? Click here to register for a free account, and gain access to more tools and data
2. Looking for more investing ideas like this? Click here to sign up for your free copy of Kapitall Weekly
3. Follow us on SeekingAlpha, Motley Fool, Nasdaq and Twitter

ABOUT KAPITALL WIRE

Kapitall Wire, which is not a broker/dealer, offers free cutting edge investing ideas, lively commentary and timely analysis of companies enhanced by interactive tools. And the Investing 101 section breaks complex concepts down to their basics, offering education to novices that doubles as a refresher course for more seasoned investors.

Kapitall Wire is a division of Kapitall Inc. Securities products and services are offered by Kapitall Generation, LLC, member FINRA/SIPC . Kapitall Generation, LLC is a wholly owned subsidiary of Kapitall, Inc.