If you are an investor who wants to earn income from your investments on a regular basis, dividend stocks that offer moderate-to-high yields are worth investigating. For a company to keep those yields up, it must keep earning profits. With this in mind, we ran a scan to find companies that are generating sizable profits. Many of the companies in our list will be familiar names, and analysts have given a recent "Buy" rating to these dividend stocks. We think you will enjoy reviewing our findings.
The Net Margin is a profitability metric that illustrates, by percentage, how much of every dollar earned gets turned into a bottom line profit. This is just one of many profitability metrics used by investors and analysts to better understand what the company is being left with at the end of the day. Generally, a firm that can expand its net profit margins over a period of time will see its stock price rise as well due to the trend of increasing profitability. Net Margin = Net Income/Total Revenue
Return on Equity [ROE] is one way to identify great potential names relative to profitability. This ratio illustrates the percentage return on shareholder equity. As well, this metric segments the company into operational efficiency, asset use efficiency, and financial leverage. Why does this matter? Simply put, it allows investors to get a real picture of how the company is generating these returns and helps identify parts of the company that may be underperforming.
We first looked for dividend stocks. From here, we then looked for companies that have achieved strong bottom line profitability (Net Margin [TTM]>10%) (ROE [TTM]>30%). We then looked for businesses that analysts rate as "Buy" (2 < mean recommendation < 3). We did not screen out any market caps or sectors.
Do you think these stocks will outperform? Use our list along with your own analysis.
1) Cedar Fair, L.P. (NYSE:FUN)
|Return on Equity||237.64%|
Cedar Fair, L.P. owns and operates amusement and water parks in the United States and Canada. Its amusement parks include Cedar Point located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Kings Island near Cincinnati, Ohio; Canada's Wonderland near Toronto, Canada; Dorney Park & Wildwater Kingdom located near Allentown in South Whitehall Township, Pennsylvania; Valleyfair located near Minneapolis/St. Paul in Shakopee, Minnesota; Michigan's Adventure located near Muskegon, Michigan; Kings Dominion near Richmond, Virginia; Carowinds in Charlotte, North Carolina; Worlds of Fun located in Kansas City, Missouri; Knott's Berry Farm located near Los Angeles in Buena Park, California; and California's Great America located in Santa Clara, California, as well as manages and operates Gilroy Gardens Family Theme Park in Gilroy, California. The company also owns and operates the Castaway Bay Indoor Waterpark Resort in Sandusky, Ohio. It owns and operates 11 amusement parks, 6 outdoor water parks, 1 indoor water park, and 5 hotels. Cedar Fair Management, Inc. serves as the general partner of Cedar Fair, L.P. The company was founded in 1983 and is based in Sandusky, Ohio.
2) McDonald's Corp. (NYSE:MCD)
|Return on Equity||37.93%|
McDonald's Corporation, together with its subsidiaries, franchises and operates McDonald's restaurants primarily in the United States, Europe, the Asia Pacific, the Middle East, and Africa. As of December 31, 2011, it operated 33,510 restaurants in 119 countries, including 27,075 franchised restaurants and 6,435 company operated restaurants. The company was founded in 1940 and is based in Oak Brook, Illinois.
3) Legacy Reserves Lp (NASDAQ:LGCY)
|Industry||Oil & Gas Drilling & Exploration|
|Return on Equity||35.72%|
Legacy Reserves LP, an independent oil and natural gas limited partnership, engages in the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States. As of December 31, 2011, it owned interests in producing oil and natural gas properties in 498 fields primarily in the Permian Basin, Texas Panhandle, Wyoming, and Oklahoma; and non-operated interests in 3,483 gross productive wells, as well as operated 2,473 gross productive wells. The company had proved reserves of approximately 63.4 million barrels of crude oil equivalent. Legacy Reserves GP, LLC operates as the general partner of the partnership. The company was founded in 2005 and its headquarters is in Midland, Texas.
4) Philip Morris International, Inc. (NYSE:PM)
|Return on Equity||754.84%|
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. Its portfolio of international and local brands include Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company's local brands comprise Sampoerna A, Dji Sam Soe, and Sampoerna Kretek in Indonesia; Fortune, Champion, and Hope in the Philippines; Diana in Italy; Optima and Apollo-Soyuz in Russia; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It sells its products in approximately 180 countries in the European Union, eastern Europe, the Middle East, Africa, Asia, Latin America, and Canada. Philip Morris International Inc. was incorporated in 1987 and is based in New York, New York.
5) Altria Group Inc. (NYSE:MO)
|Return on Equity||99.10%|
Altria Group, Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes, smokeless products, and wine in the United States and internationally. It offers cigarettes primarily under the Marlboro brand; smokeless tobacco products under the Copenhagen, Skoal, Red Seal, Husky, and Marlboro Snus brands; cigars principally under the Black & Mild brand; and pipe tobacco. The company also produces and sells blended table wines under the Chateau Ste. Michelle and Columbia Crest names; and distributes Antinori and Villa Maria Estate wines, and Champagne Nicolas Feuillatte in the United States. In addition, it maintains a portfolio of leveraged and direct finance leases in rail and surface transport, aircraft, electric power, real estate, and manufacturing. The company sells its tobacco products primarily to wholesalers, including distributors; large retail organizations, such as chain stores; and the armed services. Altria Group, Inc. markets its wine products to restaurants, wholesale clubs, supermarkets, wine shops, and mass merchandisers. The company was founded in 1919 and its headquarters is in Richmond, Virginia.
6) GlaxoSmithKline plc (NYSE:GSK)
|Industry||Drug Manufacturers - Major|
|Return on Equity||66.22%|
GlaxoSmithKline plc, together with its subsidiaries, engages in the discovery, development, manufacture, and marketing of pharmaceutical products, over the counter (OTC) medicines, and health-related consumer products worldwide. It offers pharmaceutical products in various therapeutic areas comprising respiratory, HIV, central nervous system, cardiovascular and urogenital, metabolic, anti-bacterial, oncology and emesis, vaccines, and dermatologicals. The company provides prescription medicines to treat a range of conditions. It also markets a range of vaccines to prevent life-threatening or crippling illnesses. In addition, the company provides OTC medicines. Further, it offers oral healthcare products comprising Sensodyne, a range of toothpastes and toothbrushes; Aquafresh, a range of toothpastes, toothbrushes, and mouthwashes; and Polident, Poligrip, and Corega, which are denture adhesives and cleansers. Additionally, the company provides nutritional healthcare products consisting of Lucozade, an energy and sports drinks; Horlicks, a malted, milk-based drink and food; and Ribena, an apple, orange, raspberry, and pomegranate flavored fruit drink, as well as markets skincare products. It has drug discovery research collaboration with Yale University to design various medicines that degrade disease-causing proteins. The company was incorporated in 1999 and its headquarters is in Brentford, United Kingdom.
7) Mattel Inc. (NASDAQ:MAT)
|Industry||Toys & Games|
|Return on Equity||30.33%|
Mattel, Inc., together with its subsidiaries, designs, manufactures, and markets various toy products. The company offers its products under the Mattel Girls and Boys brands, Fisher-Price brands and American Girl Brands. It also publishes advice and activity books, as well as magazines comprising American Girl. The company sells its American Girl products directly to consumers through catalog, Web site, and retail stores in the United States and Canada. Mattel sells its other products directly to retailers, including discount and free-standing toy stores, chain stores, department stores, and other retail outlets; wholesalers; and distribution centers worldwide. The company was founded in 1945 and its headquarters is in El Segundo, California.
Company profiles were sourced from Google Finance and Yahoo Finance. Financial data was sourced from Finviz on 08/29/2012.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Business relationship disclosure: This article was prepared for ZetaKap Media by one of our full-time analysts. We did not receive compensation for this article (other than from Seeking Alpha), and we have no business relationship with any company whose stock is mentioned in this article.