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While some investors are ready to pull out there hair due to the antics of the market others are leaning back in their seats with a big smile. That’s because the latter investors have put their capital and faith in firms that are not only paying them dividends to take on market risk but also performing well in a choppy economy by maximizing their asset base. This may sound too simple for some but there is a reason the old adage “keep it simple” is still being used in today’s complex world and the proof is in the pudding.

Return on Assets (ROA) is a profitability ratio that lets investors know exactly how much earnings are being generated solely off of a firm’s asset base. In addition, it helps investors judge management’s effectiveness relative to maximizing a firm’s assets. Remember, any management team can make some level of return by throwing money at a situation but only a few can make large returns on small investments.

We looked for dividend stocks with strong twelve-month trailing ROA (X>20%). From this narrowed list of candidates we screened for firms that are currently trading at no less than 20% from their 52-week highs. The number shows these firms are doing something right in this rough economy.

The list is ranked from highest to lowest by the Return on Assets (TTM):

1. Portugal Telecom SA. (PT)

Sector

Commun Services

Industry

Telecom Services

Market Cap

$6,218M

Beta

0.83

The company provides telecom and multimedia services in Portugal and Brazil. The dividend yield is 13.03%. The company has an ROA (TTM) of 37.31%. PT is trading 6.95% below its 52-week highs. The short interest was N/A as of 09/15/2011.

2. Reed Elsevier PLC. (RUK)

Sector

Consumer Cyclical

Industry

Publishing

Market Cap

$10,287M

Beta

0.59

The company is an information provider and publisher. The dividend yield is 3.92 %. The company has an ROA (TTM) of 31.30 %. RUK is trading 16.75 % below its 52-week highs. The short interest was N/A as of 09/15/2011.

3. Reed Elsevier NV. (ENL)

Sector

Consumer Cyclical

Industry

Publishing

Market Cap

$8,480M

Beta

0.65

The company is a publisher and information provider. its activities include science and medical, legal, education and business publishing. The dividend yield is 4.08 %. The company has an ROA (TTM) of 31.19%. ENL is trading 16.96% below its 52-week highs. The short interest was N/A as of 09/15/2011.

4. CBOE Holdings, Inc. (CBOE)

Sector

Financial Services

Industry

Financial Exchanges

Market Cap

$2,315M

Beta

N/A

The company is a holding company for the Chiacgo Board Options Exchange. The dividend yield is 1.64%. The company has an ROA (TTM) of 30.73%. CBOE is trading 18.65 % below its 52-week highs. The short interest was 3.70% as of 09/15/2011.

5. Microsoft Corporation. (MSFT)

Sector

Technology

Industry

Software - Infrastructure

Market Cap

$228,475M

Beta

1.02

The firm is the producer of Windows operating systems and Office suite software. The dividend yield is 2.36 %. The company has an ROA (TTM) of 21.30 %. MSFT is trading 14.84 % below its 52-week highs. The short interest was 1.10% as of 09/15/2011.

6. Taiwan Semiconductor Manufacturing (TSM)

Sector

Technology

Industry

Semiconductors

Market Cap

$63,127M

Beta

1.06

The company makes semiconductors for advanced manufacturing processes and third parties. The dividend yield is 3.40%. The company has an ROA (TTM) of 20.8%. TSM is trading 18.14% below its 52-week highs. The short interest was N/A as of 09/15/2011.

7. Cellcom Israel, Ltd. (CEL)

Sector

Commun Services

Industry

Telecom Services

Market Cap

$2,153M

Beta

0.80

The company is a provider of cell and telecom services in Israel. The dividend yield is 12.90%. The company has an ROA (TTM) of 20.40%. CEL is trading 14.74% below its 52-week highs. The short interest was 0.40% as of 09/15/2011.

8. Buenaventura Mining Company In. (BVN)

Sector

Basic Materials

Industry

Gold

Market Cap

$9,772M

Beta

0.81

The company explores for, mines, and produces gold, silver and other metals. The dividend yield is 1.22%. The company has an ROA (TTM) of 20.07%. BVN is trading 9.00% below its 52-week highs. The short interest was N/A as of 09/15/2011.

We hope this list helps as investors do their own due diligence and research on profitable dividend stocks that are posting sound market performance.



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

Source: 8 Dividend Stocks With Strong Return On Assets Ratios