Seeking Alpha
Value, growth, long-term horizon, medium-term horizon
Profile| Send Message|
( followers)  

Increases in dividends are viewed as a good sign for a stock, not just because the payment to shareholders is raised, but also because it is a show of confidence from management that they believe they can continue to pay a higher dividend indefinitely.

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

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 (NYSEARCA:SPY) index over the last month.

(Click chart for more detail)



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

List sorted by dividend yield.

1. OneBeacon Insurance Group, Ltd. (NYSE:OB): Provides specialty insurance products and services in the United States. Market cap of $1.24B. Dividend yield at 6.52%, 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 16.96%. TTM operating margin at 17.16% vs. industry operating margin at 13.62%. TTM pretax margin at 14.36% vs. industry pretax margin at 12.25%. The stock is a short squeeze candidate, with a short float at 5.72% (equivalent to 8.47 days of average volume). The stock has gained 7.74% over the last year.

2. JPMorgan Chase & Co. (NYSE:JPM): Provides various financial services worldwide. Market cap of $123.40B. Dividend yield at 3.39%, payout ratio at 13.26%. 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 62.08%. TTM operating margin at 47.17% vs. industry operating margin at 38.91%. TTM pretax margin at 25.37% vs. industry pretax margin at 17.12%. The stock is currently stuck in a downtrend, trading 5.82% below its SMA20, 12.79% below its SMA50, and 24.04% below its SMA200. The stock has performed poorly over the last month, losing 11.39%.

3. PNC Financial Services Group Inc. (NYSE:PNC): Operates as a diversified financial services company. Market cap of $26.01B. Dividend yield at 2.97%, 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 71.43%. TTM operating margin at 40.02% vs. industry operating margin at 39.40%. TTM pretax margin at 26.70% vs. industry pretax margin at 22.73%. The stock has lost 2.51% over the last year.

4. Newell Rubbermaid Inc. (NYSE:NWL): Designs, manufactures, sources, packages, and distributes consumer and commercial products. Market cap of $3.43B. Dividend yield at 2.80%, 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 28.56%. TTM operating margin at 12.0% vs. industry operating margin at 6.37%. TTM pretax margin at 5.16% vs. industry pretax margin at 4.46%. The stock is currently stuck in a downtrend, trading 9.35% below its SMA20, 12.66% below its SMA50, and 29.78% below its SMA200. It's been a rough couple of days for the stock, losing 9.11% over the last week.

5. El Paso Electric Co. (NYSE:EE): Engages in the generation, transmission, and distribution of electricity primarily in west Texas, and southern New Mexico. Market cap of $1.33B. Dividend yield at 2.76%, payout ratio at 9.62%. Current year dividend per share estimate at $0.77 vs. TTM dividend per share at $0.22. TTM gross margin at 28.68% vs. industry gross margin at 27.79%. TTM operating margin at 19.36% vs. industry operating margin at 19.22%. TTM pretax margin at 16.27% vs. industry pretax margin at 14.70%. The stock is a short squeeze candidate, with a short float at 6.84% (equivalent to 5.91 days of average volume). The stock has gained 36.99% over the last year.

6. KLA-Tencor Corporation (NASDAQ:KLAC): Engages in the design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. Market cap of $6.63B. Dividend yield at 2.66%, payout ratio at 21.07%. Current year dividend per share estimate at $1.24 vs. TTM dividend per share at $1.00. TTM gross margin at 63.11% vs. industry gross margin at 61.47%. TTM operating margin at 36.90% vs. industry operating margin at 27.0%. TTM pretax margin at 34.96% vs. industry pretax margin at 26.85%. Might be undervalued at current levels, with a PEG ratio at 0.9, and P/FCF ratio at 10.96. The stock has had a good month, gaining 15.11%.

7. CSX Corp. (NYSE:CSX): Provides rail-based transportation services. Market cap of $20.87B. Dividend yield at 2.50%, payout ratio at 23.69%. Current year dividend per share estimate at $0.70 vs. TTM dividend per share at $0.37. TTM gross margin at 38.44% vs. industry gross margin at 36.44%. TTM operating margin at 29.79% vs. industry operating margin at 26.41%. TTM pretax margin at 25.05% vs. industry pretax margin at 23.33%. The stock is currently stuck in a downtrend, trading 7.07% below its SMA20, 13.37% below its SMA50, and 19.65% below its SMA200. It's been a rough couple of days for the stock, losing 7.12% over the last week.

8. Fifth Third Bancorp (NASDAQ:FITB): Operates as a diversified financial services holding company in the United States. Market cap of $9.68B. Dividend yield at 2.45%, 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 71.43%. TTM operating margin at 43.79% vs. industry operating margin at 39.40%. TTM pretax margin at 23.22% vs. industry pretax margin at 22.73%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.22). The stock has lost 10.7% over the last year.

9. Cascade Corp. (NYSE:CASC): Manufactures loading devices and replacement parts primarily for the lift-truck and construction industry. Market cap of $381.15M. Dividend yield at 2.40%, payout ratio at 36.04%. Current year dividend per share estimate at $0.90 vs. TTM dividend per share at $0.60. TTM gross margin at 32.90% vs. industry gross margin at 32.22%. TTM operating margin at 14.21% vs. industry operating margin at 12.32%. TTM pretax margin at 13.40% vs. industry pretax margin at 10.68%. The stock has performed poorly over the last month, losing 12.98%.

10. KeyCorp (NYSE:KEY): Operates as a holding company for KeyBank National Association that provides various banking services in the United States. Market cap of $5.78B. Dividend yield at 2.11%, payout ratio at 6.12%. Current year dividend per share estimate at $0.10 vs. TTM dividend per share at $0.06. TTM gross margin at 86.97% vs. industry gross margin at 71.28%. TTM operating margin at 42.24% vs. industry operating margin at 38.99%. TTM pretax margin at 30.47% vs. industry pretax margin at 22.29%. Might be undervalued at current levels, with a PEG ratio at 0.75, and P/FCF ratio at 2.56. The stock has lost 21.78% over the last year.

11. Wells Fargo & Company (NYSE:WFC): Provides retail, commercial, and corporate banking services primarily in the United States. Market cap of $130.89B. Dividend yield at 2.03%, payout ratio at 7.65%. Current year dividend per share estimate at $0.49 vs. TTM dividend per share at $0.34. TTM gross margin at 80.18% vs. industry gross margin at 71.43%. TTM operating margin at 41.61% vs. industry operating margin at 39.40%. TTM pretax margin at 24.08% vs. industry pretax margin at 22.73%. Might be undervalued at current levels, with a PEG ratio at 0.84, and P/FCF ratio at 4.69. The stock has lost 1.74% over the last year.

*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: 11 Highly Profitable Stocks With Rapid Dividend Growth