Bank of America/ Merrill Lynch recently released criteria for companies in the S&P 500 which have the capabilities to initiate a dividend.
The 20 stock screens generated for investors included assets considered cash-rich and high- quality.
The criteria included:
- Debt level based on the median for their individual industries
- Percentage of cash of market cap – must be 2 % or higher
- Earning trends proven to be stable based on prior fiscal year earnings and current year expectations
- No major profit acceleration expected
Stocks in the financial market were exempt from said criteria.The Bank of America, Merrill Lynch screen, is not a directly recommended list. Investors need to consider their investment objectives and the fundamentals of the listed companies before making final investment decisions.[ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider][ms_featurebox style=”4″ title_font_size=”18″ title_color=”#2b2b2b” icon_circle=”no” icon_size=”46″ title=”Recommended Link” icon=”” alignment=”left” icon_animation_type=”” icon_color=”” icon_background_color=”” icon_border_color=”” icon_border_width=”0″ flip_icon=”none” spinning_icon=”no” icon_image=”” icon_image_width=”0″ icon_image_height=”” link_url=”https://offers.thecapitalist.com/p/warrenbuffet/index” link_target=”_blank” link_text=”Click Here To Find Out What It Said…” link_color=”#4885bf” content_color=”” content_box_background_color=”” class=”” id=””]Warren Buffett Just Told His Heirs What He Wants them To Do With His Fortune When He Dies. [/ms_featurebox][ms_divider style=”normal” align=”left” width=”100%” margin_top=”30″ margin_bottom=”30″ border_size=”5″ border_color=”#f2f2f2″ icon=”” class=”” id=””][/ms_divider]Adobe Systems
- Net debt to net operating profit is –2.6 x ( after taxes )
- Median industry NOPAT –1.1 x
- The list shows 8.7% of Cash percentage of market cap
- Prior year growth 134%
- Current year growth is at 33.2 %
- Price objective: $109
Centene
- Net debt to net operating profit is –1.9 x ( after taxes )
- Median industry NOPAT 3.7 x
- Cash as a percentage of market cap was 26.1 %
- Prior year growth 29.6%
- Current year growth is at 39.6 %
- Price objective: $93
Cognizant Technology Solutions
- Net debt to net operating profit is –2.2 x ( after taxes )
- Median industry NOPAT 1.1 x
- Cash as a percentage of market cap was 13 %
- Prior year growth 12.8 %
- Current year growth is at 10.4 %
- Price objective: $70
- Net debt to net operating profit is –4.9 x ( after taxes )
- Median industry NOPAT –0.4 x
- Cash as a percentage of market cap was 5.7 %
- Prior year growth 17.3 %
- Current year growth at 37.7 %
- Price objective: $145
F5 Networks
- Net debt to net operating profit is –2.2 x ( after taxes )
- Median industry NOPAT 0
- Cash as a percentage of market cap was 10.9 %
- Prior year growth 23 %
- Current year growth at 5.3 %
- Price objective: $117
Alphabet (Class A and Class C)
- Net debt to net operating profit is –4.1 x ( after taxes )
- Median industry NOPAT –0.4 x
- Cash as a percentage of market cap was 14.3 % (Class C) and 13.9 % (Class A)
- Prior year growth 13 %
- Current year growth is at 17 % (Class C) and 16.6 % (Class A)
- Price objective: $925
Illumina
- Net debt to net operating profit is –0.6 x ( after taxes )
- Median industry NOPAT –0.4 x
- Cash as a percentage of market cap was 5.8 %
- Prior year growth 30.7 %
- Current year growth is at 8.7 %
- Price objective: $170
Intuitive Surgical
- Net debt to net operating profit is –2.6 x ( after taxes )
- Median industry NOPAT –1.7 x
- Cash as a percentage of market cap was listed as 6.9 %
- Prior year growth 39.9 %
- Current year growth is reported at 7.2 %
- Price objective: $750
Michael Kors
- Net debt to net operating profit is –0.8 x ( after taxes )
- Median industry NOPAT –0 x
- Cash as a percentage of market cap was 6.8 %
- Prior year growth 32.9 %
- Current year growth is at 3.3 %
- Price objective: $62
Level 3 Communications
- Net debt to net operating profit is 2.5 x ( after taxes )
- Median industry NOPAT 7.3 x
- Cash as a percentage of market cap was 4.6 %
- Prior year growth 691.7 %
- Current year growth is at 140.7 %
- Price objective: $60
Monster Beverages
- Net debt to net operating profit is –5.3 x ( after taxes )
- Median industry NOPAT 3.3 x
- Cash as a percentage of market cap was 10.8 %
- Prior year growth 2.5 %
- Current year growth is at 28.7 %
- Price objective: $155
PayPal
- Net debt to net operating profit is –2.8 x ( after taxes )
- Median industry NOPAT 1.1 x
- Cash as a percentage of market cap was 10.8 %
- Prior year growth 203 %
- Current year growth is at 15.5 %
- Price objective: $44
Red Hat
- Net debt to net operating profit is –2.2 x ( after taxes )
- Median industry NOPAT 1.1 x
- Cash as a percentage of market cap was 8.9 %
- Prior year growth 12.6 %
- Current year growth is at 16.3 %
- Price objective: $78
Urban Outfitters
- Net debt to net operating profit is –0.8 x ( after taxes )
- Median industry NOPAT 1 x
- Cash as a percentage of market cap was 8.4 %
- Prior year growth 6 %
- Current year growth is at 8.2 %
- Price objective: $40
Varian Medical Systems
- Net debt to net operating profit is –1.5 x ( after taxes )
- Median industry NOPAT -0.4 x
- Cash as a percentage of market cap was 22.3 %
- Prior year growth 11.4 %
- Current year growth is at 6.6 %
- Price objective: $140