How would you define the perfect stocks? I know how I would define them. First of all, the companies would have no debt. Without debt, it is hard for a company to go out of business, unless it has a very high burn rate. Second, the companies should have a lot of cash, so if business gets tough, they have enough to get them through hard times. Cash also makes the company a possible candidate for takeovers. One way to measure cash is with the cash per share versus the price of the stock. A third feature of the perfect stock would be a high yield, hopefully in excess of 3%. WallStreetNewsNetwork.com just updated its list of High Cash No Debt High Yield Stocks, which covers 25 companies, showing the stock symbol, market cap, forward price-to-earnings ratio, cash per share, yield, and cash per share as a percentage of price.
One example is Superior Industries International, Inc. (SUP), which makes and markets aluminum road wheels to original equipment manufacturers. The stock trads at 13.5 times forward earnings, and sports a yield of 3.6%. This debt free company carries $5.37 in cash, or roughly 32% of the stock price.
Hot Topic Inc. (HOTT) is looking pretty hot with a 4.7% yield. The stock has a forward PE of about 36. The cash per share amounts to $1.39, or roughly a quarter of the stock price. The company is, of course, debt free.
To see the entire list of High Yield No Debt High Cash Stocks, which you can sort, change, and update, go to WallStreetNewsNetwork.com. The list has stocks with yields ranging from 3.4% to 12.6%, and cash per share as high as 47% of the stock price.
Disclosure: Author did not own any of the above at the time the article was written.