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Profitability is a very important consideration when evaluating dividend stocks. Companies with weak profitability are less likely to be able to maintain their dividend yield. If you want to rely on a stock’s dividend, be sure to check its profitability first.

We ran a screen on highly profitable stocks, beating their industry peers on gross, operating and pretax margins. We screened these stocks for those seeing rapid dividend growth, comparing the current year dividend per share estimate to the trailing-twelve-month dividend per share.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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.

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Do you think these stocks pay reliable dividends? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. OneBeacon Insurance Group, Ltd. (OB): Surety and Title Insurance Industry. Market cap of $1.34B. Dividend yield at 6.21%, payout ratio at 11.47%. Current year dividend per share estimate at $1.17 vs. TTM dividend per share at $0.84. TTM gross margin at 17.96% vs. industry gross margin at 16.78%. TTM operating margin at 17.16% vs. industry operating margin at 13.49%. TTM pretax margin at 14.36% vs. industry pretax margin at 12.05%. The stock is a short squeeze candidate, with a short float at 6.1% (equivalent to 8.42 days of average volume). The stock has had a couple of great days, gaining 8.52% over the last week.

2. PNC Financial Services Group Inc. (PNC): Money Center Banks Industry. Market cap of $25.95B. Dividend yield at 3.0%, payout ratio at 10.38%. Current year dividend per share estimate at $1.14 vs. TTM dividend per share at $0.65. TTM gross margin at 79.25% vs. industry gross margin at 70.91%. TTM operating margin at 40.02% vs. industry operating margin at 39.06%. TTM pretax margin at 26.70% vs. industry pretax margin at 22.35%. The stock has had a couple of great days, gaining 14.73% over the last week.

3. KLA-Tencor Corporation (KLAC): Semiconductor Equipment and Materials Industry. Market cap of $6.16B. Dividend yield at 2.83%, payout ratio at 21.07%. Current year dividend per share estimate at $1.21 vs. TTM dividend per share at $1.00. TTM gross margin at 63.11% vs. industry gross margin at 60.80%. TTM operating margin at 36.90% vs. industry operating margin at 26.83%. TTM pretax margin at 34.96% vs. industry pretax margin at 26.75%. Might be undervalued at current levels, with a PEG ratio at 0.83, and P/FCF ratio at 10.19. The stock has had a couple of great days, gaining 9.05% over the last week.

4. JPMorgan Chase & Co. (JPM):
Money Center Banks Industry. Market cap of $146.76B. Dividend yield at 2.77%, payout ratio at 13.26%. Current year dividend per share estimate at $0.97 vs. TTM dividend per share at $0.60. TTM gross margin at 79.98% vs. industry gross margin at 62.16%. TTM operating margin at 47.17% vs. industry operating margin at 38.65%. TTM pretax margin at 25.37% vs. industry pretax margin at 16.62%. The stock has had a couple of great days, gaining 12.66% over the last week.

5. El Paso Electric Co. (EE): Electric Utilities Industry. Market cap of $1.47B. Dividend yield at 2.58%, payout ratio at 9.62%. Current year dividend per share estimate at $0.72 vs. TTM dividend per share at $0.22. TTM gross margin at 28.68% vs. industry gross margin at 27.55%. TTM operating margin at 19.36% vs. industry operating margin at 19.05%. TTM pretax margin at 16.27% vs. industry pretax margin at 14.64%. The stock is a short squeeze candidate, with a short float at 6.79% (equivalent to 6.97 days of average volume). The stock has had a couple of great days, gaining 6.31% over the last week.

6. Fifth Third Bancorp (FITB): Regional Banks Industry. Market cap of $9.67B. Dividend yield at 2.39%, payout ratio at 14.65%. Current year dividend per share estimate at $0.24 vs. TTM dividend per share at $0.14. TTM gross margin at 75.80% vs. industry gross margin at 70.91%. TTM operating margin at 43.79% vs. industry operating margin at 39.06%. TTM pretax margin at 23.22% vs. industry pretax margin at 22.35%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.23). The stock has had a couple of great days, gaining 13.62% over the last week.

7. Newell Rubbermaid Inc. (NWL): Housewares and Accessories Industry. Market cap of $3.97B. Dividend yield at 2.38%, payout ratio at 20.49%. Current year dividend per share estimate at $0.27 vs. TTM dividend per share at $0.23. TTM gross margin at 40.46% vs. industry gross margin at 28.36%. TTM operating margin at 12.0% vs. industry operating margin at 6.31%. TTM pretax margin at 5.16% vs. industry pretax margin at 4.36%. The stock has had a couple of great days, gaining 8.1% over the last week. The stock has performed poorly over the last month, losing 12.31%.

8. CSX Corp. (CSX):
Railroads Industry. Market cap of $23.88B. Dividend yield at 2.24%, payout ratio at 23.69%. Current year dividend per share estimate at $0.57 vs. TTM dividend per share at $0.37. TTM gross margin at 38.44% vs. industry gross margin at 36.38%. TTM operating margin at 29.79% vs. industry operating margin at 26.32%. TTM pretax margin at 25.05% vs. industry pretax margin at 23.24%. The stock has had a couple of great days, gaining 7.97% over the last week. The stock has performed poorly over the last month, losing 11.27%.

*Dividend per share 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.

Source: 8 Highly Profitable Stocks With Rapid Dividend Growth