12 Dividend Champions With Impressive Profitability

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 |  Includes: CB, CBSH, CL, CLC, DOV, KO, MCD, MKC, MMM, SIAL, SPGI, WMT
by: Kapitall

One way to gauge a company’s profitability is by comparing its profit margins to industry peers – companies with higher profit margins are taking a greater percentage of revenues as profits and they have greater control of their cost structure.

We ran a screen on dividend champions (companies that have consistently raised their dividend for the past 25 years) for those that are 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 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.


(Click to enlarge)

Do you think these stocks will continue to raise their dividends? Use this list as a starting-off point for your own analysis.

List sorted by dividend yield.

1. McDonald's Corp. (NYSE:MCD): Operates as a foodservice retailer worldwide. Market cap of $90.61B. Dividend yield at 3.19%, payout ratio at 47.51%. TTM gross margin at 44.97% vs. industry gross margin at 37.23%. TTM operating margin at 30.44% vs. industry operating margin at 19.35%. TTM pretax margin at 29.27% vs. industry pretax margin at 17.97%. The stock has gained 20.8% over the last year.

2. 3M Co. (NYSE:MMM): Operates as a diversified technology company worldwide. Market cap of $50.94B. Dividend yield at 3.06%, payout ratio at 35.88%. TTM gross margin at 51.60% vs. industry gross margin at 48.95%. TTM operating margin at 21.38% vs. industry operating margin at 16.37%. TTM pretax margin at 20.85% vs. industry pretax margin at 13.19%. The stock is currently stuck in a downtrend, trading 5.97% below its SMA20, 9.91% below its SMA50, and 17.65% below its SMA200. The stock has performed poorly over the last month, losing 13.49%.

3. Wal-Mart Stores Inc. (NYSE:WMT): Operates retail stores in various formats worldwide. Market cap of $178.88B. Dividend yield at 2.81%, payout ratio at 29.84%. TTM gross margin at 27.04% vs. industry gross margin at 26.10%. TTM operating margin at 6.01% vs. industry operating margin at 5.75%. TTM pretax margin at 5.50% vs. industry pretax margin at 5.40%. The stock has lost 0.13% over the last year.

4. The Coca-Cola Company (NYSE:KO): Distributes, and markets nonalcoholic beverages worldwide. Market cap of $155.12B. Dividend yield at 2.78%, payout ratio at 33.38%. TTM gross margin at 66.67% vs. industry gross margin at 59.95%. TTM operating margin at 24.48% vs. industry operating margin at 23.11%. TTM pretax margin at 36.13% vs. industry pretax margin at 25.60%. The stock has gained 17.54% over the last year.

5. Dover Corp. (NYSE:DOV): Manufactures and sells industrial products and components, and consumables. Market cap of $8.67B. Dividend yield at 2.70%, payout ratio at 24.26%. TTM gross margin at 41.69% vs. industry gross margin at 32.20%. TTM operating margin at 15.06% vs. industry operating margin at 12.28%. TTM pretax margin at 13.43% vs. industry pretax margin at 10.65%. The stock is currently stuck in a downtrend, trading 7.63% below its SMA20, 13.6% below its SMA50, and 23.4% below its SMA200. The stock has performed poorly over the last month, losing 18.98%.

6. Commerce Bancshares Inc. (NASDAQ:CBSH): Operates as the bank holding company for Commerce Bank, N. Market cap of $3.02B. Dividend yield at 2.65%, payout ratio at 32.20%. TTM gross margin at 87.90% vs. industry gross margin at 71.50%. TTM operating margin at 46.87% vs. industry operating margin at 39.45%. TTM pretax margin at 32.0% vs. industry pretax margin at 22.77%. The stock has performed poorly over the last month, losing 11.62%.

7. Colgate-Palmolive Co. (NYSE:CL): Manufactures and markets consumer products worldwide. Market cap of $43.14B. Dividend yield at 2.62%, payout ratio at 43.72%. TTM gross margin at 61.01% vs. industry gross margin at 52.77%. TTM operating margin at 23.83% vs. industry operating margin at 19.11%. TTM pretax margin at 22.92% vs. industry pretax margin at 18.03%. The stock has gained 19.02% over the last year.

8. The Chubb Corporation (NYSE:CB): Provides property and casualty insurance to businesses and individuals. Market cap of $17.15B. Dividend yield at 2.60%, payout ratio at 21.15%. TTM gross margin at 23.47% vs. industry gross margin at 16.94%. TTM operating margin at 21.32% vs. industry operating margin at 13.61%. TTM pretax margin at 21.32% vs. industry pretax margin at 12.23%. Might be undervalued at current levels, with a PEG ratio at 0.94, and P/FCF ratio at 10.13. The stock has gained 9.19% over the last year.

9. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational, and business information markets worldwide. Market cap of $12.35B. Dividend yield at 2.44%, payout ratio at 34.22%. TTM gross margin at 61.96% vs. industry gross margin at 43.23%. TTM operating margin at 23.24% vs. industry operating margin at 16.50%. TTM pretax margin at 22.0% vs. industry pretax margin at 12.34%. The stock has gained 27.49% over the last year.

10. McCormick & Co. Inc. (NYSE:MKC): Engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. Market cap of $6.14B. Dividend yield at 2.43%, payout ratio at 35.11%. TTM gross margin at 45.28% vs. industry gross margin at 34.61%. TTM operating margin at 15.51% vs. industry operating margin at 12.75%. TTM pretax margin at 14.87% vs. industry pretax margin at 10.17%. The stock has gained 13.47% over the last year.

11. Sigma-Aldrich Corporation (NASDAQ:SIAL): Develops, manufactures, purchases, and distributes a range of chemicals, biochemicals, and equipment worldwide. Market cap of $7.54B. Dividend yield at 1.17%, payout ratio at 19.76%. TTM gross margin at 56.50% vs. industry gross margin at 37.30%. TTM operating margin at 25.52% vs. industry operating margin at 16.99%. TTM pretax margin at 24.11% vs. industry pretax margin at 15.46%. The stock has gained 2.86% over the last year.

12. CLARCOR Inc. (NYSE:CLC): Provides filtration products, filtration systems and services, and consumer and industrial packaging products worldwide. Market cap of $2.08B. Dividend yield at 1.16%, payout ratio at 26.90%. TTM gross margin at 36.56% vs. industry gross margin at 32.20%. TTM operating margin at 15.56% vs. industry operating margin at 12.28%. TTM pretax margin at 15.50% vs. industry pretax margin at 10.65%. The stock has performed poorly over the last month, losing 11.09%.

*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.