5 Highly Profitable Dividend Stocks Rated Buy By UBS

Includes: CSCO, FITB, JPM, K, KEY
by: Kapitall

Interested in stocks paying dividend income? For ideas on where to start your search, we ran a screen you may be interested in.

We screened for stocks paying dividend yields above 1% and sustainable payout ratios below 50%. We screened these stocks for those with "Buy" ratings from UBS (analysts at UBS expect these stocks to outperform).

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the 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.

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

1. Cisco Systems, Inc. (NASDAQ:CSCO): Designs, manufactures, and sells Internet protocol (NYSE:IP)-based networking and other products related to the communications and information technology industry worldwide. Dividend yield at 1.20%, payout ratio at 15.46%. On 10/27/11, UBS had a Buy rating on the stock. TTM gross margin at 66.07% vs. industry average at 59.44%. TTM operating margin at 21.66% vs. industry average at 18.27%. TTM pretax margin at 19.32% vs. industry average at 18.26%.

2. Fifth Third Bancorp (NASDAQ:FITB): Operates as a diversified financial services holding company in the United States. Dividend yield at 2.37%, payout ratio at 23.54%. On 11/8/11, UBS had a Buy rating on the stock. TTM gross margin at 83.76% vs. industry average at 67.95%. TTM operating margin at 50.4% vs. industry average at 39.94%. TTM pretax margin at 27.44% vs. industry average at 21.24%.

3. JPMorgan Chase & Co. (NYSE:JPM): Provides various financial services worldwide. Dividend yield at 2.64%, payout ratio at 22.02%. On 5/4/11, UBS had a Buy rating on the stock. TTM gross margin at 80.89% vs. industry average at 73.79%. TTM operating margin at 47.74% vs. industry average at 44.14%. TTM pretax margin at 24.13% vs. industry average at 18.99%.

4. Kellogg Company (NYSE:K): Manufactures and markets ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America, and the Asia Pacific. Dividend yield at 3.43%, payout ratio at 48.76%. On 2/7/11, UBS had a Buy rating on the stock. TTM gross margin at 44.19% vs. industry average at 32.38%. TTM operating margin at 15.28% vs. industry average at 11.77%. TTM pretax margin at 13.12% vs. industry average at 9.28%.

5. KeyCorp (NYSE:KEY): Operates as a holding company for KeyBank National Association that provides various banking services in the United States. Dividend yield at 1.48%, payout ratio at 11.12%. On 11/8/11, UBS had a Buy rating on the stock. TTM gross margin at 88.03% vs. industry average at 71.34%. TTM operating margin at 41.56% vs. industry average at 40.64%. TTM pretax margin at 28.64% vs. industry average at 21.98%.

*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.