Profitability is an important consideration when choosing dividend stocks. If a company’s profitability declines, its dividend may be in immediate danger of getting discontinued.
Here we screened large cap dividend stocks for those that have seen at least a 15% increase in dividend per share, comparing the trailing-twelve-month dividend to the current year’s dividend per share estimate. These stocks pay sustainable dividend yields below 7% and payout ratios below 35%. We then screened this universe for those that are also highly profitable, beating their industry peers on gross, operating, and pretax margins.
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.
Do you think these companies pay reliable dividends? Use this list as a starting-off point for your own analysis.
List sorted by dividend yield.
1. JPMorgan Chase & Co. (JPM): Money Center Banks Industry. Market cap of $158.27B. Dividend yield at 2.51%, payout ratio at 12.70%. Current year dividend per share estimate at $0.96 vs. TTM dividend per share at $0.60. TTM gross margin at 79.98% vs. industry gross margin at 70.07%. TTM operating margin at 48.27% vs. industry operating margin at 40.57%. TTM pretax margin at 25.37% vs. industry pretax margin at 17.72%. The stock has gained 3.45% over the last year.
2. CSX Corp. (CSX): Railroads Industry. Market cap of $27.78B. Dividend yield at 1.91%, payout ratio at 22.57%. Current year dividend per share estimate at $0.48 vs. TTM dividend per share at $0.33. TTM gross margin at 38.38% vs. industry gross margin at 36.28%. TTM operating margin at 29.59% vs. industry operating margin at 25.80%. TTM pretax margin at 24.49% vs. industry pretax margin at 22.47%. The stock has gained 54.45% over the last year.
3. Union Pacific Corporation (UNP): Railroads Industry. Market cap of $49.30B. Dividend yield at 1.89%, payout ratio at 24.18%. Current year dividend per share estimate at $1.68 vs. TTM dividend per share at $1.42. TTM gross margin at 37.99% vs. industry gross margin at 36.28%. TTM operating margin at 29.33% vs. industry operating margin at 25.80%. TTM pretax margin at 26.36% vs. industry pretax margin at 22.47%. The stock has gained 49.6% over the last year.
4. Wells Fargo & Company (WFC): Money Center Banks Industry. Market cap of $142.17B. Dividend yield at 1.79%, payout ratio at 11.06%. Current year dividend per share estimate at $0.48 vs. TTM dividend per share at $0.27. TTM gross margin at 77.78% vs. industry gross margin at 69.53%. TTM operating margin at 39.64% vs. industry operating margin at 37.92%. TTM pretax margin at 22.19% vs. industry pretax margin at 20.91%. The stock has gained 4.27% over the last year.
5. Aetna Inc. (AET): Health Care Plans Industry. Market cap of $16.30B. Dividend yield at 1.40%, payout ratio at 4.11%. Current year dividend per share estimate at $0.48 vs. TTM dividend per share at $0.19. TTM gross margin at 28.41% vs. industry gross margin at 21.07%. TTM operating margin at 8.90% vs. industry operating margin at 8.56%. TTM pretax margin at 8.06% vs. industry pretax margin at 6.84%. The stock has gained 56.64% over the last year.
*Dividend data sourced from Screener.co, profitability data sourced from Fidelity, all other data sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
