Beyond The Balance Sheet

Forbes magazine has a regular feature where they look at companies using unconventional metrics, as opposed to conventional ones like book value and earnings.

In a recent article, they looked at three areas: employment(expansion and productivity), ability to pay dividends, and pensions to see which companies are doing well despite the possible recession, and which are positioned to cope with any further economic weakness.


Expansion

Here, they looked at which companies are adding employees, and investing in fixed capital expenditures. If you look at the first chart in the article, which is labeled "Expansion", you see that AT&T, Amazon.com, and Google are listed here. This is a sign that they expect to grow and have confidence.


Productivity

In the "productivity" chart, they show companies with changes in sales per employee. This can give an indication of corporate prosperity. In this case, AmerisourceBergen is an example of a prosperous company, while the numbers for Jacobs Engineering and Whole Foods are down.


Dividends

This table looks at dividends as a percentage of free cash flow. Stocks with rich dividends are usually recommended as safe places in a bear market. Here, we can see which stocks can easily make their payments (and have money to possibly increase them), and which companies can't really afford to pay them.


Pension Expectations

This table shows companies to avoid because they used a possibly over-optimistic return to calculate its pension liabilities.


Pension Surplus or Shortfall

This table shows stocks that have over funded (good) and under funded (bad) pensions.


Pension Allocation

The last table lists stocks you might want to avoid because a high percentage of their pension assets are allocated to risky investments.