However, the key
to a profitability ratio isn't the number itself, but how that number compares
in relation with a company's peers or its own history.
Investing is
really about one thing and one thing only: the ability to participate alongside
the profit generating ability of a business.
You may also like: 5 Profitably Growing Dividend Stocks.
You may also like: 5 Profitably Growing Dividend Stocks.
With profits at
the very foundation of investing, it means that investors need to have a firm
grasp on the ability of a company they're investing in to turn a profit. The
best way to gauge how well a company is doing in that regard is to take a
closer look at its profitability ratios to see how that company really stacks
up. There are three profitability ratios in particular that every investor
really should know.
While there are a
number of profitability ratios that measure a company's ability to generate
profit from the sales or services it provides, one of the most important is the
net profit margin. It tells us what percentage of revenue a company keeps after
all its bills are paid. The formula is: Net Margin = (Net Income or Loss) /
Sales.
Recently, I've
published an article about stocks with high Margins. My guess is that they
have a real competitive advantage by realizing such high margins. Under the
results were many non-dividend paying companies or stocks that have recently
started to pay dividends like Apple and Blackrock.
Attached, you can
find a list of stocks with the highest net profit margin below the Dividend
Champions League. Those stocks have raised Dividends by more than 25
consecutive years.
In total, 16 stocks matched my criteria of net profit margins above 20%.
In total, 16 stocks matched my criteria of net profit margins above 20%.
Here are the most profitable dividend growth stocks, by yield...
Universal Health Realty Income Trust -- Yield: 5.33%
Universal Health Realty Income Trust (NYSE:UHT) employs people, generates revenue of $59.79 million and has a net income of $51.55 million. The current market capitalization stands at $639.02 million.Universal Health Realty Income Trust’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $40.45 million. The EBITDA margin is 67.66% (the operating margin is 86.23% and the net profit margin 86.23%).
Financials: The total debt represents 49.70% of Universal Health Realty Income Trust assets and the total debt in relation to the equity amounts to 104.19%. Due to the financial situation, a return on equity of 27.85% was realized by Universal Health Realty Income Trust.
Twelve trailing months earnings per share reached a value of $4.60. Last fiscal year, Universal Health Realty Income Trust paid $2.52 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.43, the P/S ratio is 10.69 and the P/B ratio is finally 3.12. The dividend yield amounts to 5.33%.
Stock Charts:
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| Long-Term Stock Price Chart of Universal Health Realty Income Trust (UHT) |
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| Long-Term Dividend Payment History of Universal Health Realty Income Trust (UHT) |
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| Long-Term Dividend Yield History of Universal Health Realty Income Trust (UHT) |
National Retail Properties -- Yield: 4.68%
National Retail Properties (NYSE:NNN) employs 64 people, generates revenue of $434.85 million and has a net income of $179.78 million. The current market capitalization stands at $5.00 billion.National Retail Properties’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $383.17 million. The EBITDA margin is 88.12% (the operating margin is 61.23% and the net profit margin 41.34%).
Financials: The total debt represents 35.34% of National Retail Properties assets and the total debt in relation to the equity amounts to 56.48%. Due to the financial situation, a return on equity of 6.07% was realized by National Retail Properties.
Twelve trailing months earnings per share reached a value of $1.15. Last fiscal year, National Retail Properties paid $1.65 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 32.41, the P/S ratio is 11.49 and the P/B ratio is finally 1.96. The dividend yield amounts to 4.68%.
Stock Charts:
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| Long-Term Stock Price Chart of National Retail Properties (NNN) |
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| Long-Term Dividend Payment History of National Retail Properties (NNN) |
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| Long-Term Dividend Yield History of National Retail Properties (NNN) |
Helmerich & Payne -- Yield: 4.56%
Helmerich & Payne (NYSE:HP) employs 11,901 people, generates revenue of $3,719.71 million and has a net income of $708.77 million. The current market capitalization stands at $6.49 billion.Helmerich & Payne’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,558.75 million. The EBITDA margin is 41.91% (the operating margin is 28.36% and the net profit margin 19.05%).
Financials: The total debt represents 1.18% of Helmerich & Payne assets and the total debt in relation to the equity amounts to 1.62%. Due to the financial situation, a return on equity of 15.10% was realized by Helmerich & Payne.
Twelve trailing months earnings per share reached a value of $5.60. Last fiscal year, Helmerich & Payne paid $2.62 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.77, the P/S ratio is 1.75 and the P/B ratio is finally 1.33. The dividend yield amounts to 4.56%.
Stock Charts:
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| Long-Term Stock Price Chart of Helmerich & Payne (HP) |
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| Long-Term Dividend Payment History of Helmerich & Payne (HP) |
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| Long-Term Dividend Yield History of Helmerich & Payne (HP) |
Altria Group -- Yield: 3.98%
Altria Group (NYSE:MO) employs 9,000 people, generates revenue of $24,522.00 million and has a net income of $5,070.00 million. The current market capitalization stands at $111.39 billion.Altria Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $7,874.00 million. The EBITDA margin is 32.11% (the operating margin is 30.89% and the net profit margin 20.68%).
Financials: The total debt represents 42.62% of Altria Group assets and the total debt in relation to the equity amounts to 487.49%. Due to the financial situation, a return on equity of 141.82% was realized by Altria Group.
Twelve trailing months earnings per share reached a value of $2.58. Last fiscal year, Altria Group paid $2.00 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 21.98, the P/S ratio is 4.54 and the P/B ratio is finally 37.16. The dividend yield amounts to 3.98%.
Stock Charts:
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| Long-Term Stock Price Chart of Altria Group (MO) |
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| Long-Term Dividend Payment History of Altria Group (MO) |
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| Long-Term Dividend Yield History of Altria Group (MO) |
Community Trust Bancorp -- Yield: 3.54%
Community Trust Bancorp (NASDAQ:CTBI) employs 1,012 people, generates revenue of $143.87 million and has a net income of $43.25 million. The current market capitalization stands at $613.56 million.Community Trust Bancorp’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $67.87 million. The EBITDA margin is 38.31% (the operating margin is 35.22% and the net profit margin 24.41%).
Financials: The total debt represents 8.26% of Community Trust Bancorp assets and the total debt in relation to the equity amounts to 68.67%. Due to the financial situation, a return on equity of 10.05% was realized by Community Trust Bancorp.
Twelve trailing months earnings per share reached a value of $2.54. Last fiscal year, Community Trust Bancorp paid $1.18 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.81, the P/S ratio is 3.46 and the P/B ratio is finally 1.37. The dividend yield amounts to 3.54%.
Stock Charts:
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| Long-Term Stock Price Chart of Community Trust Bancorp (CTBI) |
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| Long-Term Dividend Payment History of Community Trust Bancorp (CTBI) |
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| Long-Term Dividend Yield History of Community Trust Bancorp (CTBI) |
Johnson & Johnson -- Yield: 3.15%
Johnson & Johnson (NYSE:JNJ) employs 126,500 people, generates revenue of $74,331.00 million and has a net income of $16,323.00 million. The current market capitalization stands at $264.09 billion.Johnson & Johnson’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $26,305.00 million. The EBITDA margin is 35.39% (the operating margin is 27.66% and the net profit margin 21.96%).
Financials: The total debt represents 14.31% of Johnson & Johnson assets and the total debt in relation to the equity amounts to 26.90%. Due to the financial situation, a return on equity of 22.70% was realized by Johnson & Johnson.
Twelve trailing months earnings per share reached a value of $5.68. Last fiscal year, Johnson & Johnson paid $2.76 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.79, the P/S ratio is 3.55 and the P/B ratio is finally 3.81. The dividend yield amounts to 3.15%.
Stock Charts:
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| Long-Term Stock Price Chart of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Payment History of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
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| 16 Most Profitable Dividend Champions By Net Profit Margin (Click to enlarge) |
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- 3 Fairly Priced High-Margin Stocks Warren Buffett Would Like
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- 20 Big Dividend Challengers With Highest Margins
