Many companies rely on sales as their primary source of earnings, so analyzing a company's sales is usually a very important part of overall analysis. For ideas on how to start your own look into a company's sales, we ran a screen.
We began by screening a universe of "dividend champions" from DRiP Investing. These stocks have consistently raised their dividends over the past 25 years, which may indicate dividend sustainability going forward.
We then screened for those stocks with encouraging sales trends, with higher growth in revenue than inventory year over year, as well as inventory comprising a smaller portion of current assets over the same time period.
To understand why these trends are positive, think why the opposite trends would be negative. If a company sees higher growth in inventory than revenue, it may indicate that the company is having trouble selling its inventory. Although management may just have decided to hold more inventory in anticipation of greater future sales.
Business section: Investing ideas
Below are the final results from this stock screen. These dividend champions have seen positive trends in sales relative to inventory over the past year.
Do you think these companies will continue to see strong sales trends? If so, do you think they will continue to increase their dividends?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Genuine Parts
2. Illinois Tool Works
3. Nacco Industries
5. Weyco Group
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Accounting data soured from Google Finance.
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