Stock Screen for Dividend Initiation!
There are dividend stocks and then there are stocks that will initiate a dividend soon. Wouldn’t it be nice to have a crystal ball and buy a stock with a likelihood of dividend initiation in the short-term? We don’t have a crystal ball but we do have a stock screener that finds companies that might initiate a dividend because of strong operating performance, strong cash flow, flexibility in debt servicing and low growth expectations. We ran just that stock screen for you!
Each of these 5 stocks could end up paying dividends, read the report to find out why!
Dividend Initiation likely on these 5 stocks?
The Capital Cube Stock Screener screened US companies with likelihood of dividend initiation and came up with over 50 results! The top 5 stocks by market cap include Intuitive Surgical, Inc. (NASDAQ:ISRG), F5 Networks, Inc. (NASDAQ:FFIV), Denbury Resources Inc. (NYSE:DNR), Alaska Air Group, Inc. (NYSE:ALK) and MSCI Inc (NYSE:MSCI).
Focus Stock: F5 Networks Inc. (NASDAQ: FFIV)
Shares for F5 Networks, Inc. (NASDAQ:FFIV) crossed the 200 Day Moving Average last week after the company had its earnings call on Wednesday. Today, street analysts have raised the target price of the stock. Our analysis of the preliminary earnings suggests:
F5 Networks, Inc. (NASDAQ:FFIV) is a leader among its peers because it enjoys both better than peer median annual revenue growth of 19.6% and better than peer median earnings growth performance 14.0%. The company currently converts every 1% of change in annual revenue into 0.7% of change in annual reported earnings.
The company’s return on assets is above its peer median both in the current period (13.5% vs. peer median 3.4%) and also over the past five years (12.3% vs. peer median 4.6%). This performance suggests that F5 Networks, Inc. (NASDAQ:FFIV)′s relatively high operating returns are sustainable.
F5 Networks, Inc. (NASDAQ:FFIV) has a dominant operating model relative to its peers. It has a successful operating strategy with above median net profit margins of 18.6% (vs. peer median of 6.7%) and relatively high asset turns of 0.7x (vs. peer median of 0.6x). Though the company’s net margin continues to trend downward it is still within one standard deviation above its five-year average net margin of 16.7%.