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

Gauging a company’s profitability can be difficult because of the many options available – one interesting idea is to compare a company’s profit margins with its industry averages. Companies with higher margins are taking a greater percentage of sales as profits, and they have tighter control over their cost structure.

We ran a screen on stocks from the tech sector for those paying dividend yields above 1%. We then screened these stocks for those with high profitability, beating their industry averages on gross, operating, or 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.

(Click chart for more detail)

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

List sorted by difference between gross margin and industry average.

1. International Game Technology (NYSE:IGT): Designs, manufactures, and markets electronic gaming equipment and systems worldwide. Market cap of $4.73B. Dividend yield at 1.51%, payout ratio at 24.52%. TTM gross margin at 66.48% vs. industry gross margin at 37.34%. TTM operating margin at 27.10% vs. industry operating margin at 19.68%. TTM pretax margin at 21.89% vs. industry pretax margin at 18.08%. The stock has lost 6.91% over the last year.

2. Linear Technology Corp. (NASDAQ:LLTC): Designs, manufactures, and markets a line of linear integrated circuits. Market cap of $6.79B. Dividend yield at 3.22%, payout ratio at 39.08%. TTM gross margin at 81.16% vs. industry gross margin at 60.63%. TTM operating margin at 50.54% vs. industry operating margin at 25.49%. TTM pretax margin at 47.82% vs. industry pretax margin at 24.70%. The stock has lost 12.1% over the last year.

3. MTS Systems Corp. (NASDAQ:MTSC): Supplies test systems and industrial position sensors in the Americas, Europe, and Asia. Market cap of $624.46M. Dividend yield at 2.51%, payout ratio at 25.91%. TTM gross margin at 45.98% vs. industry gross margin at 36.74%. TTM operating margin at 15.66% vs. industry operating margin at 9.94%. TTM pretax margin at 15.68% vs. industry pretax margin at 10.75%. The stock has gained 3.59% over the last year.

4. Intel Corporation (NASDAQ:INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap of $121.39B. Dividend yield at 3.52%, payout ratio at 30.30%. TTM gross margin at 74.58% vs. industry gross margin at 60.63%. TTM operating margin at 34.45% vs. industry operating margin at 25.49%. TTM pretax margin at 33.66% vs. industry pretax margin at 24.70%. The stock has gained 16.98% over the last year.

5. Analog Devices Inc. (NASDAQ:ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap of $10.51B. Dividend yield at 2.83%, payout ratio at 32.66%. TTM gross margin at 70.32% vs. industry gross margin at 60.63%. TTM operating margin at 35.90% vs. industry operating margin at 25.49%. TTM pretax margin at 35.46% vs. industry pretax margin at 24.70%. The stock has lost 4.57% over the last year.

6. Maxim Integrated Products Inc. (NASDAQ:MXIM): Designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits worldwide. Market cap of $7.56B. Dividend yield at 3.40%, payout ratio at 49.63%. TTM gross margin at 69.63% vs. industry gross margin at 60.63%. TTM operating margin at 27.76% vs. industry operating margin at 25.49%. TTM pretax margin at 26.37% vs. industry pretax margin at 24.70%. The stock has gained 13.25% over the last year.

7. Xilinx Inc. (NASDAQ:XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. Market cap of $8.39B. Dividend yield at 2.38%, payout ratio at 31.03%. TTM gross margin at 66.92% vs. industry gross margin at 60.56%. TTM operating margin at 31.03% vs. industry operating margin at 25.41%. TTM pretax margin at 29.06% vs. industry pretax margin at 24.64%. The stock has gained 15.12% over the last year.

8. Badger Meter Inc. (NYSE:BMI): Engages in manufacturing and marketing liquid flow measurement and control technology products worldwide. Market cap of $436.51M. Dividend yield at 2.22%, payout ratio at 36.10%. TTM gross margin at 39.07% vs. industry gross margin at 36.74%. TTM operating margin at 13.17% vs. industry operating margin at 9.94%. TTM pretax margin at 13.08% vs. industry pretax margin at 10.75%. The stock is a short squeeze candidate, with a short float at 8.95% (equivalent to 10.17 days of average volume). The stock has lost 32.69% over the last year.

9. 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 $7.97B. Dividend yield at 2.93%, payout ratio at 22.12%. TTM gross margin at 62.17% vs. industry gross margin at 60.63%. TTM operating margin at 36.26% vs. industry operating margin at 25.49%. TTM pretax margin at 34.48% vs. industry pretax margin at 24.70%. The stock has gained 24.09% over the last year.

10. Molex Inc. (NASDAQ:MOLX): Manufactures and sells electronic components worldwide. Market cap of $4.09B. Dividend yield at 3.43%, payout ratio at 43.24%. TTM gross margin at 37.24% vs. industry gross margin at 36.82%. TTM operating margin at 12.42% vs. industry operating margin at 9.97%. TTM pretax margin at 12.10% vs. industry pretax margin at 10.73%. The stock has gained 5.72% over the last year.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Source: 10 Tech Dividend Stocks With Impressive Profitability