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The Net Margin (TTM) is a profitability ratio that reviews a firm’s bottom line over the last twelve months. This metric illustrates how much of a profit is earned from each dollar generated. Generally a firm that can expand its Net Margin over time will have its share price increase due to increased profitability.

The Current Ratio is a liquidity ratio that illustrates a firm’s ability to pay short-term obligations. The higher this ratio is the more easily a firm should be able to pay off all its short-term obligations should they all come due at once. A firm with a liquidity ratio of less than 1 is a red liquidity flag. As well, if a firm has poor inventory turnover or receivables, this could affect the quality of its current ratio.

We first screened for dividend stocks that have strong profitability relative to the bottom line (Net Margin TTM>10%). From this narrowed pool we screened for firms with a strong liquidity (Current Ratio>1). We did not screen out any companies by market capitalization.

The firms are listed highest to lowest according to the dividend yield:

1. Giant Interactive Group, Inc. (GA)

Sector

Industrials

Industry

Business Services

Market Cap

$842M

Beta

0.61

The company develops and operates online games in China. The firm has a Net Margin (TTM) of 62.03%. GA’s Current Ratio is 7.20. The company’s dividend yield is 81.69%. The short interest was N/A as of 09/30/2011. Given GA's extraordinarily high dividend yield, this deserves extra attention when reviewing the firm in greater detail.

2. Capital Product Partners L.P. (CPLP)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$280M

Beta

0.93

The company operates a fleet of product tankers and charters them out. The firm has Net Margins (TTM) of 20.50%. CPLP’s Current Ratio is 3.10. The company’s dividend yield is 14.93%. The short interest was 6.30% as of 09/30/2011.

3. Knightsbridge Tankers, Ltd. (VLCCF)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$425M

Beta

1.06

The company operates a fleet of international seaborne transportation ships that move crude oil. The firm has Net Margins (TTM) of 33.81%. VLCCF’s Current Ratio is 5.60. The company’s dividend yield is 11.51%. The short interest was 9.90% as of 09/30/2011.

4. Southern Copper Corporation. (SCCO)

Sector

Basic Matls

Industry

Copper

Market Cap

$23,926M

Beta

1.58

The company is an integrated producer of copper and other minerals in Mexico and Peru. The firm has Net Margins (TTM) of 32.37%. SCCO's Current Ratio is 4.69. The company’s dividend yield is 7.74%. The short interest was N/A as of 09/30/2011.

5. Spectra Energy Partners, LP. (SEP)

Sector

Energy

Industry

Oil & Gas Midstream

Market Cap

$2,907M

Beta

0.01

The company is a partnership that operates natural gas transportation and storage assets. The firm has Net Margins (TTM) of 75.82%. SEP’s Current Ratio is 7.34. The company’s dividend yield is 6.02%. The short interest was N/A as of 09/30/2011.

6. Realty Income Corporation. (O)

Sector

Real Estate

Industry

REIT - Retail

Market Cap

$4,116M

Beta

0.84

The company is a real estate investment trust. The firm has Net Margins (TTM) of 31.68%. O’s Current Ratio is 2.30. The company’s dividend yield is 5.35%. The short interest was 6.4% as of 09/30/2011.

7. Grupo Aeroportuario del Surest. (ASR)

Sector

Industrials

Industry

Airports & Air Services

Market Cap

$1,685 M

Beta

1.51

The company owns and operates airports. The firm has Net Margins (TTM) of 30.34% ASR.’s Current Ratio is 3.13. The company’s dividend yield is 4.54%. The short interest was N/A as of 09/30/2011.

8. Pacific Airport Group. (PAC)

Sector

Industrials

Industry

Airports & Air Services

Market Cap

$34.30M

Beta

1.21

The company operates and develops airports primarily in Mexico. The firm has Net Margins (TTM) of 34.3%. PAC’s Current Ratio is 4.40. The company’s dividend yield is 4.43%. The short interest was N/A as of 09/30/2011.

9. Microchip Technology, Inc. (MCHP)

Sector

Technology

Industry

Semiconductors

Market Cap

$6,376M

Beta

1.06

Develops and manufactures specialized semiconductor products used by its customers for a variety of embedded control applications. The firm has Net Margins (TTM) of 28.49%. MCHP’s Current Ratio is 6.39. The company’s dividend yield is 4.13%. The short interest was 12.90% as of 09/30/2011.

10. CNinsure, Inc. (CISG)

Sector

Financial Services

Industry

Insurance Brokers

Market Cap

$331M

Beta

1.26

The firm has Net Margins (TTM) of 34.96%. CISG’s Current Ratio is 11.28. The company’s dividend yield is 3.66%. The short interest was N/A as of 09/30/2011.

We hope this list helps as investors do their own due diligence on dividend stocks with strong profitability and current ratio. Lastly, these were the top ten companies listed at the time when this article was written.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 10 Dividend Stocks With Enormous Profitability And Cash On Hand