Do you prefer stocks that pay regular and reliable dividends? If so, here's a look at some interesting high-growth dividend names. We began by screening for dividend stocks: those paying dividend yields above 2% and sustainable payout ratios below 50%. We then screened for those with high-growth trends, with five-year projected EPS growth above 15%.
Then to analyze these companies' profitability, we ran DuPont analysis on the names. DuPont analyzes profitability by breaking up return on equity (net income/equity) into three components:
= (Net Profit/Equity)
= (Net profit/Sales)*(Sales/Assets)*(Assets/Equity)
= (Net Profit margin)*(Asset turnover)*(Leverage ratio)
Because increases in net margin and asset turnover are considered good things, DuPont focuses on companies with these positive characteristics—increasing ROE along with:
•Decreasing leverage, (i.e. decreasing Asset/Equity ratio)
•Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio)
Those companies that pass DuPont are seeing positive trends in the sources of their increasing profitability, which adds further weight to the idea that the names are profitable. For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.
Do you think these stocks offer the best of both worlds? Use this list as a starting point for your own analysis. The list is sorted by dividend yield.
1. Koppers Holdings Inc. (KOP): Provides carbon compounds and commercial wood treatment products to aluminum, railroad, specialty chemical, utility, rubber, concrete, and steel industries. Market cap at $650.72M, most recent closing price at $31.36. Dividend yield at 3.06%, payout ratio at 42.71%. 5-year projected EPS growth at 17.50%. MRQ net profit margin at 4.1% vs. 2.61% yoy. MRQ sales/assets at 0.505 vs. 0.473 yoy. MRQ assets/equity at 6.703 vs. 7.106 yoy.
2. Las Vegas Sands Corp. (LVS): Develops and operates various integrated resort properties primarily in the United States, Macau, and Singapore. Market cap at $29.96B, most recent closing price at $36.41. Dividend yield at 2.75%, payout ratio at 13.35%. 5-year projected EPS growth at 26.04%. MRQ net profit margin at 18.06% vs. 13.7% yoy. MRQ sales/assets at 0.121 vs. 0.099 yoy. MRQ assets/equity at 2.597 vs. 2.838 yoy.
3. Insperity, Inc. (NSP): Provides various personnel management services in the United States. Market cap at $689.01M, most recent closing price at $26.48. Dividend yield at 2.57%, payout ratio at 45.27%. 5-year projected EPS growth at 27.67%. MRQ net profit margin at 2.33% vs. 1.64% y/y. MRQ sales/assets at 0.803 vs. 0.736 y/y. MRQ assets/equity at 2.892 vs. 2.935 y/y.
4. Aceto Corporation (ACET): Engages in sourcing, quality assurance, regulatory support, marketing, and distributing chemically derived pharmaceuticals, biopharmaceuticals, specialty chemicals, and crop protection products. Market cap at $234.41M, most recent closing price at $8.74. Dividend yield at 2.29%, payout ratio at 32.29%. 5-year projected EPS growth at 22.00%. MRQ net profit margin at 4.43% vs. 3.27% yoy. MRQ sales/assets at 0.392 vs. 0.388 yoy. MRQ assets/equity at 1.837 vs. 1.91 yoy.
*Accounting data sourced from Google Finance, 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.