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Do you worry about stock market risk? One idea is to consider a stock's recent trading volatility. We ran a screen with that idea in mind.

We began by screening for low-volatility stocks, with average intra-day volatility over the last month under 2% (meaning, on average, these stocks have traded within a 2% range each day). We then screened for dividend stocks: those paying dividend yields above 2% and sustainable payout ratios below 50%.

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:

ROE

= (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.‬

(click to enlarge)

Tool provided by Kapitall. More investing ideas on Kapitall Wire.

Do you think these stocks offer less risk? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. Sunoco Logistics Partners L.P. (NYSE:SXL): Engages in the transport, terminalling, and storage of refined products and crude oil, as well as the purchase and sale of crude oil in the United States. Market cap at $4.38B, most recent closing price at $42.09. Dividend yield at 4.44%, payout ratio at 47.75%. Average intra-day volatility over the last month at 1.98%. MRQ net profit margin at 4.58% vs. 3.87% y/y. MRQ sales/assets at 0.64 vs. 0.496 y/y. MRQ assets/equity at 4.232 vs. 4.869 y/y.

2. Dr Pepper Snapple Group, Inc. (NYSE:DPS): Engages in the manufacture and distribution of non-alcoholic beverages in the United States, Canada, and Mexico. Market cap at $9.52B, most recent closing price at $45.28. Dividend yield at 3.01%, payout ratio at 46.68%. Average intra-day volatility over the last month at 1.61%. MRQ net profit margin at 10.98% vs. 10.87% y/y. MRQ sales/assets at 0.182 vs. 0.171 y/y. MRQ assets/equity at 3.881 vs. 3.949 y/y.

3. Fidelity National Financial, Inc. (NYSE:FNF): Provides title insurance, mortgage services, specialty insurance, and information services in the United States. Market cap at $4.2B, most recent closing price at $18.64. Dividend yield at 2.99%, payout ratio at 30.39%. Average intra-day volatility over the last month at 1.87%. MRQ net profit margin at 8.46% vs. 6.48% y/y. MRQ sales/assets at 0.204 vs. 0.157 y/y. MRQ assets/equity at 2.199 vs. 2.231 y/y.

4. Fidelity National Information Services, Inc. (NYSE:FIS): Provides banking and payments technology solutions worldwide. Market cap at $9.15B, most recent closing price at $30.97. Dividend yield at 2.58%, payout ratio at 28.39%. Average intra-day volatility over the last month at 1.91%. MRQ net profit margin at 10.33% vs. 8.74% y/y. MRQ sales/assets at 0.105 vs. 0.1 y/y. MRQ assets/equity at 2.093 vs. 2.105 y/y.

5. CNA Financial Corporation (NYSE:CNA): Provides property and casualty insurance products to small, middle-market, and large businesses and organizations primarily in the United States, Europe, Canada, and Hawaii. Market cap at $7.11B, most recent closing price at $26.31. Dividend yield at 2.27%, payout ratio at 19.82%. Average intra-day volatility over the last month at 1.80%. MRQ net profit margin at 7.39% vs. 5.64% y/y. MRQ sales/assets at 0.04 vs. 0.039 y/y. MRQ assets/equity at 4.626 vs. 4.807 y/y.

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Source: 5 Low-Risk Dividend Stocks With Strong Sources Of Profitability