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If you are looking to boost your portfolio’s income, then this article will provide you with an interesting group of companies that you may want to keep an eye on.

To construct this list we looked for stocks with dividend yields above 2% and:

  • Trailing Twelve Month (TTM) payout ratio < 3-year average payout ratio
  • Expected dividend per share > most recent dividend per share
  • And increasing returns on equity (ROE)

Then, for the sake of quality, we then sifted through this universe of stocks and kept only those that had encouraging DuPont breakdowns – which implies:

  • Improving profit margin, i.e. higher Net Income/ Revenues
  • Improving asset turnover, i.e. higher Sales/Assets
  • Decreasing leverage ratio, i.e. lower Assets/Equity

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Considering this information, which of these income stocks do you think has the most upward momentum moving forward?

1. Northrop Grumman Corporation (NOC): Conglomerates Industry. Market cap of $18.94B. Dividend yield at 3.09%. TTM payout ratio at 26.74% vs. 3-year average at 68.09%. Expected dividend per share $1.94 vs. most recent annualized dividend $1.84. MRQ profit margin 7.87% vs. previous quarter at 6.78%. MRQ sales/assets at 25.0% vs. previous quarter at 23.0%. MRQ assets/equity at 2.11 vs. previous quarter at 2.35. The stock is a short squeeze candidate, with a short float at 8.95% (equivalent to 12.19 days of average volume). The stock has gained 18.48% over the last year.

2. Packaging Corp. of America (PKG): Packaging & Containers Industry. Market cap of $2.71B. Dividend yield at 3.01%. TTM payout ratio at 29.81% vs. 3-year average at 43.65%. Expected dividend per share $0.76 vs. most recent annualized dividend $0.6. MRQ profit margin 5.94% vs. previous quarter at 3.48%. MRQ sales/assets at 28.0% vs. previous quarter at 25.0%. MRQ assets/equity at 2.18 vs. previous quarter at 2.39. It's been a rough couple of days for the stock, losing 6.76% over the last week.

3. Autoliv, Inc. (ALV): Auto Parts Industry. Market cap of $6.36B. Dividend yield at 2.51%. TTM payout ratio at 14.52% vs. 3-year average at 26.41%. Expected dividend per share $1.77 vs. most recent annualized dividend $1.05. MRQ profit margin 8.61% vs. previous quarter at 7.35%. MRQ sales/assets at 35.0% vs. previous quarter at 33.0%. MRQ assets/equity at 1.95 vs. previous quarter at 2.11. The stock is a short squeeze candidate, with a short float at 5.8% (equivalent to 5.08 days of average volume). The stock has gained 42.14% over the last year.

4. Petrobras Argentina SA (PZE): Major Integrated Oil & Gas Industry. Market cap of $1.82B. Dividend yield at 2.47%. TTM payout ratio at 0.0% vs. 3-year average at 11.49%. Expected dividend per share $0.53 vs. most recent annualized dividend $0.0. MRQ profit margin 4.43% vs. previous quarter at 4.22%. MRQ sales/assets at 17.0% vs. previous quarter at 13.0%. MRQ assets/equity at 2.26 vs. previous quarter at 2.34. The stock has performed poorly over the last month, losing 14.39%.

5. The Scotts Miracle-Gro Co. (SMG): Agricultural Chemicals Industry. Market cap of $3.18B. Dividend yield at 2.04%. TTM payout ratio at 25.92% vs. 3-year average at 30.36%. Expected dividend per share $1.0 vs. most recent annualized dividend $0.63. MRQ profit margin 15.72% vs. previous quarter at 11.28%. MRQ sales/assets at 37.0% vs. previous quarter at 34.0%. MRQ assets/equity at 3.9 vs. previous quarter at 4.53. It's been a rough couple of days for the stock, losing 5.13% over the last week.

*Data sourced from Screener.co and Finviz

Source: Income Ideas: Top 5 High Yield Stocks With Decreasing Payout, Encouraging DuPont