3 Dividend Champions With Impressive Profitability

Includes: CBSH, CTBI, MCD
by: Kapitall

Do you like to be able to rely on a stock's dividend income? For a look at stocks with a long history of paying dividends, we ran a screen.

We began with a list of dividend champions from DRiP Investing, stocks that have consistently increased their dividend over the last 25 years. These stocks currently pay dividend yields above 2% and sustainable payout ratios below 50%.

We then screened for those with impressive profitability as well, with higher gross, operating, and pretax profit margins than their industry averages by at least 5% on each margin.

Interactive Chart: Press Play to compare changes in market cap 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 dividends? Use this list as a starting point for your own analysis.

List sorted by difference between pretax profit margin and industry average.

1. Commerce Bancshares, Inc. (NASDAQ:CBSH): Operates as the bank holding company for Commerce Bank. Market cap at $3.58B, most recent closing price at $40.40. Dividend yield at 2.28%, payout ratio at 30.56%. TTM gross margin at 91.69% vs. industry average at 73%. TTM operating margin at 50.69% vs. industry average at 40.4%.TTM pretax margin at 35.75% vs. industry average at 22.67%.

2. McDonald's Corp. (NYSE:MCD): Operates as a foodservice retailer worldwide. Market cap at $97.38B, most recent closing price at $95.83. Dividend yield at 2.92%, payout ratio at 48.32%. TTM gross margin at 43.51% vs. industry average at 36.71%. TTM operating margin at 30.76% vs. industry average at 19.2%.TTM pretax margin at 29.74% vs. industry average at 17.43%.

3. Community Trust Bancorp Inc. (NASDAQ:CTBI): Operates as the holding company for Community Trust Bank, Inc. Market cap at $496.96M, most recent closing price at $32.00. Dividend yield at 3.88%, payout ratio at 46.08%. TTM gross margin at 82.36% vs. industry average at 73.16%. TTM operating margin at 50.53% vs. industry average at 40.39%.TTM pretax margin at 30.02% vs. industry average at 22.7%.

*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.