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If you’re considering dividend stocks for sources of income, be sure to also consider the strength of company profitability. If a company’s profitability suffers, its dividend yield may be in danger of being discontinued.

Here we ran a screen on dividend champions – companies that have consistently maintained and raised their dividend yield for the past 25 years. We screened these companies 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 stocks will continue to increase their dividends? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. Wal-Mart Stores Inc. (NYSE:WMT): Discount, Variety Stores Industry. Market cap of $187.41B. Dividend yield at 2.71%, payout ratio at 29.22%. TTM gross margin at 27.03% vs. industry gross margin at 25.14%. TTM operating margin at 6.03% vs. industry operating margin at 5.58%. TTM pretax margin at 5.55% vs. industry pretax margin at 5.24%. The stock has gained 8.74% over the last year.

2. The Chubb Corporation (NYSE:CB): Property and Casualty Insurance Industry. Market cap of $17.99B. Dividend yield at 2.54%, payout ratio at 20.43%. TTM gross margin at 24.77% vs. industry gross margin at 17.07%. TTM operating margin at 22.61% vs. industry operating margin at 13.74%. TTM pretax margin at 22.61% vs. industry pretax margin at 12.05%. The stock has gained 20.81% over the last year.

3. The McGraw-Hill Companies, Inc. (MHP): Publishing Industry. Market cap of $13.13B. Dividend yield at 2.32%, payout ratio at 34.71%. TTM gross margin at 62.05% vs. industry gross margin at 43.38%. TTM operating margin at 23.33% vs. industry operating margin at 17.39%. TTM pretax margin at 21.83% vs. industry pretax margin at 13.59%. The stock has gained 48.77% over the last year.

4. Commerce Bancshares Inc. (NASDAQ:CBSH): Regional Banks Industry. Market cap of $3.74B. Dividend yield at 2.15%, payout ratio at 32.13%. TTM gross margin at 87.90% vs. industry gross margin at 69.53%. TTM operating margin at 47.93% vs. industry operating margin at 37.92%. TTM pretax margin at 32.0% vs. industry pretax margin at 20.91%. The stock has gained 16.23% over the last year.

*Dividend champions sourced from DRiP Investing, 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.

Source: 4 Dividend Champions With Impressive Profitability