5 Highly Profitable Stocks With Rising Dividends and Decreasing Payout Ratio

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Includes: BOKF, GLDD, NUS, UFS, WSFS
by: Kapitall

Certain dividend trends can help an investor gain insight into the reliability of a company’s dividend yield. One trend is a rising dividend per share while the company’s payout ratio (dividends/earnings) is decreasing. This implies that earnings are growing, and dividends are not becoming a larger fraction of earnings.

We screened highly profitable stocks, beating their industry peers on gross, operating, and pretax margins over the trailing twelve months (TTM) for those that have seen rising dividends (comparing the current year dividend per share estimate to the most recent fiscal year dividend per share) while seeing a falling payout ratio (comparing the trailing-twelve-month ratio to the three-year average).

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 (NYSEARCA:SPY) index over the last month.

(Click chart for more detail)

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. BOK Financial Corp. (NASDAQ:BOKF): Regional Banks Industry. Market cap of $3.65B. Dividend yield at 2.06%, payout ratio at 27.04%. Current year dividend per share estimate at $1.08 vs. most recent fiscal year dividend per share at $0.99. TTM payout ratio at 27.04% vs. 3-year average at 31.61%. TTM gross margin at 87.32% vs. industry gross margin at 70.58%. TTM operating margin at 48.43% vs. industry operating margin at 39.02%. TTM pretax margin at 29.88% vs. industry pretax margin at 21.68%. The stock has gained 9.84% over the last year.

2. Nu Skin Enterprises Inc. (NYSE:NUS): Personal Products Industry. Market cap of $2.38B. Dividend yield at 1.65%, payout ratio at 26.42%. Current year dividend per share estimate at $0.54 vs. most recent fiscal year dividend per share at $0.50. TTM payout ratio at 26.42% vs. 3-year average at 32.40%. TTM gross margin at 84.37% vs. industry gross margin at 69.12%. TTM operating margin at 14.57% vs. industry operating margin at 12.35%. TTM pretax margin at 11.81% vs. industry pretax margin at 8.65%. The stock is a short squeeze candidate, with a short float at 11.45% (equivalent to 8.15 days of average volume). The stock has gained 36.75% over the last year.

3. Domtar Corporation (NYSE:UFS): Paper & Paper Products Industry. Market cap of $3.76B. Dividend yield at 1.58%, payout ratio at 6.18%. Current year dividend per share estimate at $1.16 vs. most recent fiscal year dividend per share at $0.75. TTM payout ratio at 6.18% vs. 3-year average at 17.43%. TTM gross margin at 26.13% vs. industry gross margin at 23.65%. TTM operating margin at 13.58% vs. industry operating margin at 8.48%. TTM pretax margin at 9.53% vs. industry pretax margin at 7.57%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.77). The stock has gained 65.01% over the last year.

4. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD): Heavy Construction Industry. Market cap of $354.04M. Dividend yield at 1.40%, payout ratio at 14.51%. Current year dividend per share estimate at $0.07 vs. most recent fiscal year dividend per share at $0.07. TTM payout ratio at 14.51% vs. 3-year average at 39.71%. TTM gross margin at 22.68% vs. industry gross margin at 11.71%. TTM operating margin at 9.49% vs. industry operating margin at 5.27%. TTM pretax margin at 6.28% vs. industry pretax margin at 4.31%. The stock has had a good month, gaining 12.95%.

5. WSFS Financial Corp. (NASDAQ:WSFS): Regional Banks Industry. Market cap of $344.86M. Dividend yield at 1.20%, payout ratio at 26.12%. Current year dividend per share estimate at $0.49 vs. most recent fiscal year dividend per share at $0.48. TTM payout ratio at 26.12% vs. 3-year average at 34.68%. TTM gross margin at 64.52% vs. industry gross margin at 57.21%. TTM operating margin at 32.12% vs. industry operating margin at 29.89%. TTM pretax margin at 12.51% vs. industry pretax margin at 10.72%. The stock has gained 6.03% over the last year.

*Profitability data sourced from Fidelity, dividend per share data and payout ratios sourced from Screener.co, 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.