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If you are looking to improve your portfolio’s income, this list will provide with a list of high yield and profitable stocks you may want to keep an eye on.

To construct this list we looked for stocks with market caps above $300M, dividend yield greater than 3.5% and beta between 0 and 0.5. Once we had gathered this universe of about 100 stocks, we compared each of these names against their industry and kept only those that beat the average in all of the following profitability ratios:

  • Gross margin
  • Operating margin
  • Pretax margin

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 (NYSEARCA:SPY) index over the last month. To access a complete analysis of this list's recent performance, click here.

Considering this data, which of stocks would you be most likely to put your money to work with? (Click here to access an interactive list snapshot of all stocks mentioned below.)

Kinder Morgan Energy Partners LP (NYSE:KMP): Oil & Gas Pipelines Industry. Market cap of $22.76B. Dividend yield at 6.39%. Beta of 0.33. Gross margin 39.0% vs. industry average 32.77%. Operating margin 21.84% vs. industry average 13.81%. Pretax margin 18.65% vs. industry average 13.54%. The stock has gained 15.98% over the last year.

Magellan Midstream Partners LP (NYSE:MMP): Oil & Gas Pipelines Industry. Market cap of $6.55B. Dividend yield at 5.3%. Beta of 0.35. Gross margin 38.38% vs. industry average 32.77%. Operating margin 25.95% vs. industry average 13.81%. Pretax margin 20.26% vs. industry average 13.54%. The stock has gained 35.94% over the last year.

Duke Energy Corporation (NYSE:DUK): Electric Utilities Industry. Market cap of $25.02B. Dividend yield at 5.21%. Beta of 0.45. Gross margin 35.58% vs. industry average 27.46%. Operating margin 23.26% vs. industry average 19.0%. Pretax margin 15.93% vs. industry average 14.15%. The stock has gained 21.53% over the last year.

PPL Corporation (NYSE:PPL): Electric Utilities Industry. Market cap of $15.84B. Dividend yield at 5.1%. Beta of 0.48. Gross margin 36.25% vs. industry average 27.41%. Operating margin 28.65% vs. industry average 18.97%. Pretax margin 17.7% vs. industry average 14.13%. The stock has gained 19.4% over the last year.

People's United Financial Inc. (NASDAQ:PBCT): Savings & Loans Industry. Market cap of $4.69B. Dividend yield at 4.81%. Beta of 0.28. Gross margin 83.76% vs. industry average 55.79%. Operating margin 34.82% vs. industry average 28.27%. Pretax margin 15.46% vs. industry average 10.7%. The stock has lost 3.25% over the last year.

Southern Company (NYSE:SO): Electric Utilities Industry. Market cap of $33.85B. Dividend yield at 4.74%. Beta of 0.35. Gross margin 30.74% vs. industry average 27.41%. Operating margin 21.57% vs. industry average 18.95%. Pretax margin 17.26% vs. industry average 14.12%. The stock has gained 24.8% over the last year.

Chunghwa Telecom Co. Ltd. (NYSE:CHT): Telecom Services Industry. Market cap of $33.05B. Dividend yield at 4.65%. Beta of 0.44. Gross margin 57.52% vs. industry average 49.63%. Operating margin 27.54% vs. industry average 15.74%. Pretax margin 27.77% vs. industry average 13.98%. The stock has gained 83.03% over the last year.

AGL Resources Inc. (AGL): Gas Utilities Industry. Market cap of $3.14B. Dividend yield at 4.48%. Beta of 0.49. Gross margin 29.23% vs. industry average 22.23%. Operating margin 22.06% vs. industry average 13.71%. Pretax margin 16.59% vs. industry average 11.23%. The stock has gained 13.22% over the last year.

Northwest Natural Gas Company (NYSE:NWN): Gas Utilities Industry. Market cap of $1.19B. Dividend yield at 3.89%. Beta of 0.32. Gross margin 26.03% vs. industry average 22.23%. Operating margin 18.19% vs. industry average 13.71%. Pretax margin 13.8% vs. industry average 11.23%. The stock is a short squeeze candidate, with a short float at 8.5% (equivalent to 17.18 days of average volume). The stock has gained 3.69% over the last year.

Tompkins Financial Corporation. (NYSEMKT:TMP): Regional Banks Industry. Market cap of $420.51M. Dividend yield at 3.52%. Beta of 0.42. Gross margin 79.59% vs. industry average 69.0%. Operating margin 40.18% vs. industry average 37.68%. Pretax margin 26.82% vs. industry average 20.46%. The stock has gained 7.15% over the last year.

*Data sourced from Fidelity and Finviz.

Source: 10 High Yield Stocks With Strong Profit Margins