Do you like to be able to rely on a stock's dividend income? We ran a screen with this idea in mind.
We began by screening for stocks paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened for those that also appear undervalued relative to earnings growth, with PEG below 1.
We then screened for those with strong profitability compared to industry peers, with higher gross, operating, and pretax margins than their industry averages by at least 5% on each margin. This indicates that these companies are taking a greater percentage of their revenues as profits, and they also have stronger control over their cost structures.
For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Tool provided by Kapitall.
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 margin and industry average.
1. Kronos Worldwide Inc. (KRO): Engages in the production and marketing of titanium dioxide pigments in North America and Europe. Market cap at $1.97B, most recent closing price at $17.02. Dividend yield at 3.53%, payout ratio at 17.51%. PEG at 0.71. TTM gross margin at 43.72% vs. industry average at 37.36%. TTM operating margin at 31.4% vs. industry average at 16.98%. TTM pretax margin at 30.29% vs. industry average at 15.8%.
2. Las Vegas Sands Corp. (LVS): Develops, and operates various integrated resort properties primarily in the United States, Macau, and Singapore. Market cap at $37.93B, most recent closing price at $46.10. Dividend yield at 2.17%, payout ratio at 13.35%. PEG at 0.78. TTM gross margin at 48.04% vs. industry average at 36.76%. TTM operating margin at 26.48% vs. industry average at 19.3%. TTM pretax margin at 23.13% vs. industry average at 17.43%.
3. JPMorgan Chase & Co. (JPM): Provides various financial services worldwide. Market cap at $125.89B, most recent closing price at $33.07. Dividend yield at 3.63%, payout ratio at 23.90%. PEG at 0.99. TTM gross margin at 81.73% vs. industry average at 61.34%. TTM operating margin at 47.11% vs. industry average at 38.28%. TTM pretax margin at 23.78% vs. industry average at 18.28%.
*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.
