11 Dividend Champions With Impressive Profitability

by: Kapitall

Interested in highly profitable stocks that also pay reliable dividends? Here are some ideas to get started on your search.

We ran a screen on "dividend champions," i.e. stocks that have consistently raised their dividends over the past 25 years. We screened these stocks for those with high profitability relative to their industry peers, beating their industry averages of gross, operating, and pretax margins.

‪Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six 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 companies have strong enough profitability to continue increasing their dividends? Use this list as a starting point for your own analysis.

List sorted alphabetically.

1. AFLAC Inc. (NYSE:AFL): Provides supplemental health and life insurance. Dividend yield at 2.74%. Payout ratio at 29.90%. TTM gross margin at 14.02% vs. industry average at 14.01%. TTM operating margin at 14.02% vs. industry average at 11.12%. TTM pretax margin at 13.15% vs. industry average at 9.76%.

2. Commerce Bancshares Inc. (NASDAQ:CBSH): Operates as the bank holding company for Commerce Bank, N. Dividend yield at 2.26%. Payout ratio at 31.00%. TTM gross margin at 90.61% vs. industry average at 71.45%. TTM operating margin at 49.83% vs. industry average at 40.71%. TTM pretax margin at 34.59% vs. industry average at 22.38%.

3. Colgate-Palmolive Co. (NYSE:CL): Manufactures and markets consumer products worldwide. Dividend yield at 2.56%. Payout ratio at 45.36%. TTM gross margin at 60.09% vs. industry average at 51.79%. TTM operating margin at 23.22% vs. industry average at 18.47%. TTM pretax margin at 22.64% vs. industry average at 16.25%.

4. Community Trust Bancorp Inc. (NASDAQ:CTBI): Operates as the holding company for Community Trust Bank, Inc. Dividend yield at 4.02%. Payout ratio at 48.82%. TTM gross margin at 80.09% vs. industry average at 71.45%. TTM operating margin at 48.66% vs. industry average at 40.71%. TTM pretax margin at 27.5% vs. industry average at 22.38%.

5. The Coca-Cola Company (NYSE:KO): Distributes, and markets nonalcoholic beverages worldwide. Dividend yield at 2.78%. Payout ratio at 33.32%. TTM gross margin at 65.5% vs. industry average at 59.17%. TTM operating margin at 23.33% vs. industry average at 22.81%. TTM pretax margin at 33.62% vs. industry average at 24.02%.

6. McDonald's Corp. (NYSE:MCD): Operates as a foodservice retailer worldwide. Dividend yield at 2.83%. Payout ratio at 47.42%. TTM gross margin at 43.45% vs. industry average at 36.88%. TTM operating margin at 30.71% vs. industry average at 19.45%. TTM pretax margin at 29.67% vs. industry average at 17.87%.

7. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational, and business information markets worldwide. Dividend yield at 2.22%. Payout ratio at 34.87%. TTM gross margin at 61.84% vs. industry average at 42.4%. TTM operating margin at 23.45% vs. industry average at 18.8%. TTM pretax margin at 22.02% vs. industry average at 14.93%.

8. McCormick & Co. Inc. (NYSE:MKC): Engages in the manufacture, marketing, and distribution of flavor products and other specialty food products to the food industry worldwide. Dividend yield at 2.45%. Payout ratio at 36.91%. TTM gross margin at 43.83% vs. industry average at 32.61%. TTM operating margin at 14.91% vs. industry average at 11.89%. TTM pretax margin at 13.98% vs. industry average at 9.35%.

9. 3M Co. (NYSE:MMM): Operates as a diversified technology company worldwide. Dividend yield at 2.54%. Payout ratio at 36.16%. TTM gross margin at 50.11% vs. industry average at 37.23%. TTM operating margin at 20.86% vs. industry average at 14.89%. TTM pretax margin at 20.37% vs. industry average at 13.79%.

10. Tompkins Financial Corporation. (NYSEMKT:TMP): Provides banking and financial services to individuals, corporations, and other business clients in New York. Dividend yield at 3.56%. Payout ratio at 41.95%. TTM gross margin at 81.23% vs. industry average at 68.19%. TTM operating margin at 41.12% vs. industry average at 40.04%. TTM pretax margin at 28.14% vs. industry average at 21.59%.

11. Wal-Mart Stores Inc. (NYSE:WMT): Operates retail stores in various formats worldwide. Dividend yield at 2.38%. Payout ratio at 31.11%. TTM gross margin at 26.93% vs. industry average at 24.5%. TTM operating margin at 5.96% vs. industry average at 5.51%. TTM pretax margin at 5.45% vs. industry average at 5.16%.

*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.