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Home > 4 Healthcare Dividend Stocks With High Liquidity That Can Manage Debt

4 Healthcare Dividend Stocks With High Liquidity That Can Manage Debt

June 19th, 2012 at 08:18 am

TECH Interested in gaining exposure to temperature calibratorcompanies? Do you prefer stocks that pay their fair share in dividend income? Interested in companies with minimal debt? We ran a screen you might be interested in.

The Current ratio is a liquidity ratio used to determine a company's financial health. The metric illustrates how easily a firm can pay back its short obligations all at once through current assets. A company that has a current ratio of one or less is generally a liquidity red flag. Now this doesn't mean the company will go bankrupt tomorrow, but it also doesn't bode well for the company, and may indicate that it could have an issue paying back upcoming obligations.

The Quick ratio measures a pressure comparator company's ability to use its cash or assets to extinguish its current liabilities immediately. Quick assets include assets that presumably can be converted to cash at close to their book values. A company with a Quick Ratio of less than 1 cannot currently pay back its current liabilities. The quick ratio is more conservative than the Current Ratio because it excludes inventory from current assets, since some companies have difficulty turning their inventory into cash. If short-term obligations need to be paid off immediately, sometimes the current ratio would overestimate a company's short-term financial strength. In general, the higher the ratio, the greater the company's liquidity (i.e., the better able to meet current obligations using liquid assets).

The Debt/Equity Ratio illustrates how aggressively a company is financing its growth via debt. The more debt financing that is used in a capital structure, the more volatile earnings can become due to the additional interest expense. Should a company's potentially enhanced earnings fail to exceed the cost associated with debt financing over time, this can lead the company toward substantial trouble.

We first looked for healthcare dividend stocks. We then looked for companies that have strong liquidity (Current Ratio>2)(Quick Ratio>2). We then looked for water pressure data logger businesses that have maintained a sound capital structure (D/E Ratio<.3). We did not screen out any market caps.

Do you think these stocks offer both value and growth? Please use our list to assist with your own analysis.

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