16 Most Profitable Dividend Champions By Net Profit Margin

By definition, profitability ratios measure a company's ability to generate profit for the owners. There are dozens of profitability ratios that could be used, each measuring a company's profit against a desired benchmark such as sales, assets, or equity.

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.

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%.

Here are the most profitable dividend growth stocks, by yield...

5 Profitably Growing Dividend Stocks

Looking for stocks that are real profit-growth machines? There’s not many.

There are just five companies in the Standard & Poor’s 500, including financial Wells Fargo (WFC), food company Hershey (HSY) and retailer Home Depot (HD) that have boosted their profit each of the past six calendar years and that pay a market-beating 2% or higher annual dividend.

Attached is a list of the greatest companies on the market with phenomenal earnigns growth. Which do you like?

These are the results:

3 Fairly Priced High-Margin Stocks Warren Buffett Would Like

Everybody wants to make money, big money over the long-haul. You put money into a stock and get twice of this amount back in 10 years. That's great and I have often invested into stocks that doubled in a decade easily.

Today I like to come back to return. It's very important to see that the company makes good profits on its annual sales. The higher the margin, net or operational, the better is the market dominance of the firm.

I like companies with high margins, Google and Apple have unbelievable high margins. You might wonder but they have no direct competition and can charge customers each price they want, there is no alternative and if you need those products or you think you must have them, you must pay the bill.

You also may like: These 7 Dividend Cash Cows Produce Money Like Milk

Warren Buffett is also a great investor who invested into stocks that produce high returns on invested capital. It's the guarantee that the firm makes internal revenues which could be used to pay investors.

I ran a screen that searched for the accompanying criteria: 

- Average returns on invested capital > 12% over the last 5 years
- Current return on invested capital > its 5-year average 

I sifted further for organizations with a long history of solid sales and profit improvements combined with robust, and enhancing, net revenues that are not profoundly leveraged by debt. I added the accompanying extra criteria: 

- Average sales growth > 10% over the last 5 years

- Average EPS growth > 10% over the last 5 years

- Average operating profit margin > 10% over the last 5 years

- Current operating profit margin > its 5-year average

3 companies jumped on top of my screen. Very informative...

8 High-Return Creating Stocks

When you invest in dividend stocks you need also look at internal return rates. The most popular ratios are return on equity and return on investment.

A company that has a big return on equity and also low debt ratios means that the high ratio was not created by taking debt and boosting earnings. Great for us investors; we own a piece of a high income generating company.

If the company can scale up its sales by taking more debt and issuing new shares, our return could boost. That's also one reason why I look at low debt with good return on equity ratios. If the company also do stock buybacks and hiked dividends, great!

My experience is that no companies fulfill everything. It's no shame when a company suffers and do not meet every optimum value. Each business is volatile and risky.

I've tried to create a screen, based on some return figures. Below are my 8 favorites. At the end of this article, you can find a list with 16 additional stocks.

These are my main criteria:
- Midcap+
- Forward P/E under 15
- Operating Margin over 15 percent
- Debt-to-equity under 1
- Return on Equity 15%+
- Payout half of profits
- Mid-digit Earnigns growth forecasts

8 high return creating stocks, low debt and price ratios included are...

5 Stocks Warren Buffett Keeps An Eye On...

Attached are five more stocks with fundamentals that meet Warren Buffett target criteria. 

I've introduced a few more stocks in this blog earlier this month and I believe that it's a good tool to get new stock ideas in a hot market.

The markets are not cheap for the time being and high-quality stocks have a much higher premium rate. But the good thing is that this should not make it impossible to find new investment targets.

You must have patience to get the right investments at the right prices. Only the disciplined investor makes the better return.

5 stocks with Warren Buffett like criteria are...

5 Stocks That Warren Buffett Would Love: Part II

Yesterday, I wrote about stocks that Warren Buffett would love. 

I introduced five picks that are often mentioned when analysts talk about potential takeover targets by the guru investor from Omaha.

Today I will continue this stock idea spinning by showing you additional companies that fulfill the following criteria:

- Market Capitalization from $15 Billion to $40 Billion

- Capital Expenditures / Net Fixed Assets under 10%

- 5-Year Average Growth in ROIC in Highest 50%

- P/E Ratio Below Average Company Value in Home Market

- Return on Common Equity over 10%

- Excludes Banks, Brokerages, Asset Managers, Technology, Biotechnology Companies

There are a few stocks available on the market that fulfill these restrictions. Some of those stocks are still in his latest portfolio but there are also many fresh ideas as you might have seen in the first part of this article serial.

Additional 5 stocks that Warren Buffett would love are...

20 Big Dividend Challengers With Highest Margins

Dividend income growth stocks with high margins and big market capitalization originally published at "long-term-investments.blogspot.com". Every dividend is only half worth as it should be when the dividend payments are not sustainable or from a low margin business that needs money to keep the business running.

What investors want is a high profitability, a high margin. The strong dividend comes from alone in the long-run.

Today I like to focus on dividend growth stocks that have raised their payments over a period of more than five years but less than 10 years in a row. I like to show you, which of the higher capitalized companies work at the highest margins on the market. 

It’s quite different to compare unequal business models but that’s the nature of economic. Investors look for the most profitable opportunities and they want to put their money into the most promising vehicle. Tobacco delivers a greater return than food. But food gives you a better return than retail.

The results show the top 20 companies with margins between 17.57 percent and 32.67 percent. Eleven of the results have a current buy or better recommendation.

20 Most Profitable Dividend Aristocrats

Dividend Aristocrats with highest operating margins originally published at "long-term-investments.blogspot.com". Dividend Aristocrats are some of the best dividend growth stocks with a proven dividend hike series of more than 25 years. But if you are a fundamental investor, you also look for a strength business. Margins are a good indicator for a healthy business.

The margins are important for investors. They show if a company is getting stronger or even weaker within its business area. A very high margin shows that the company has products with a big customer satisfaction and desire. Clients need those products and they pay a high price because they can’t find a better provider.
Sometimes margins are very high due to one-off effects. Basic material companies benefitted from high raw commodity prices. They are in a one-off situation which can also keep up for years.

Today I like to look at the Dividend Aristocrats list and show you the most profitable companies, measured by the highest operating margin. The index has 54 constituents and the top 20 stocks have a margin between 16 and 45 percent. That’s well above the index average. 14 of the results have a current buy or better rating.

11 Most Profitable High Yields Within The S&P 500

High Yield Stocks From The S&P 500 With Very High Margins Researched By “long-term-investments.blogspot.com”. Profitability is very important. The higher the profit margins, the better the market position and market strength of a company.

However, I screened the popular S&P 500 index by high yield stocks with an operating margin of more than 10 percent. Eleven firms have such a high margin of which one yield at double-digit rates. Five have a current buy or better recommendation by brokerage firms.

10 Most Profitable Dividend Challengers To Consider

Dividend Challengers With Highest Return On Investment Researched By Dividend Yield - Stock, Capital, Investment. Dividend Challengers are stocks with a history of rising dividend of more than 5 years in a row but less than 10 years. Stocks with such a long dividend growth history have a high reliability but which one are currently the best in terms of profitability?

I screened the 189 Dividend Challengers by the highest return on investment (ROI) and observed only the stocks with the highest figures. Ten companies have currently the highest ROI of more than 25 percent.

The Best Industrial Dividend Stocks 2012

Industrial Goods Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. The U.S. economy has a strong industrial sector. 350 stocks belong to the sector that has a total market capitalization of USD 58.64 trillion. He is still cheap with a P/E ratio of 12.67 and a dividend yield of 2.27 percent. The best yielding stocks from the sector are from the waste management and manufacturing housing industry.

The Best Consumer Dividend Stocks

Consumer Goods Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Consumer goods stocks are of low volatility. Consumers rarely change their behavior in terms of preferred brands when the economy is getting worse. That’s why many consumer goods companies are so stable. They grow with their population/ customer base and could pay stable dividends.

I screened the consumer goods sector by stocks with an operating margin and return on investment over 15 percent. In addition, the stock should have a minimum dividend yield of two percent. Fifteen companies fulfilled these criteria of which two are high yields.

The Best Dividend Stocks From The Service Sector

Services Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Service is characterized by hard work and low margins but there are some companies with wonderful business models that generate double digit margins within the service sector. I think about McDonalds or Starbucks. They created a huge shareholder value due to the global expansion of the brand and realized big economies of scale.

I screened the service sector by stocks with an operating margin and return on investment over 15 percent, a dividend yield over two percent and finally a market capitalization over USD 300 million. Thirteen companies fulfilled these criteria of which four are high yields and six are recommended to buy or better.

The Best Basic Material Dividend Stocks

Basic Material Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Basic materials are the source of all economic activities but their prices are very cyclic and something like the fever curve of the economy. In booming times, basic resources are rare and prices high; therefore margins are very high.

I screened the basic material sector by the most profitable stocks (stocks with an operating margin and return on investment over 20 percent) with a dividend yield over 1 percent. Because of the huge amount of results (24 stocks), I selected only those stocks with a market capitalization above USD 2 billion. Thirteen companies’ fulfilled these criteria of which five are high yields and nine are recommended to buy or better.

The Most Profitable Utility Dividend Stocks

Utility Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Utilities are stable dividend payer but they only generate slow growth for investors and they are very capital intensive. Nevertheless, people can make money with utility stocks.

I screened the utility sector by the most profitable stocks (stocks with an operating margin and return on investment over 5 percent) with a dividend yield over 4 percent. Exactly nine companies fulfilled these criteria. Most of the results come from the gas utility industry. Five stocks have a buy or strong buy rating.

14 High Profitable Technology Stocks With A Yield Over 3%

Technology Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Technology stocks are characterized by high growth, high margins and low dividends. They normally pay low dividends because they want to finance new technologies with high growth potential. Many of the big IT companies serve billions of cash but they don’t know where to invest it.

I screened the technology sector by the most profitable stocks (stocks with an operating margin and return on investment over 20 percent) with a dividend yield over 3 percent. Exactly fourteen companies fulfilled these criteria. Most of the results come from the semiconductor or communication industry. Four stocks have a double digit yield and five are recommended to buy or they have a strong buy rating.

7 Most Profitable Healthcare Dividend Stocks With Great Yields

Healthcare Dividend Stocks With High Return On Investments And Big Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Healthcare dividend stocks delivered a fantastic return over the recent twenty years. Now, they are struggling due to the fact that most of their patents are drain off within the upcoming years. They have no serious alternative to compensate the expected revenue losses and to drive growth. Companies with high margins will survive the consolidation best. Here is a little screen of dividend stocks from the healthcare sector that have the best margins and returns. Both measured by a return on investment and an operating margin of more than 20 percent. Seven stocks fulfilled these criteria of which five come from the drug manufacturing industry. Also five have a current buy or better recommendation.

9 Most Profitable Dividend Achievers

Dividend Achievers With High Return On Investments And Great Operating Margins Researched By Dividend Yield - Stock, Capital, Investment. Dividend Achievers are stocks with an impressive dividend growth history. They raised their distributions for at least 10 consecutive years. Out there are 189 companies that fulfilled these growth criteria. But who are the best picks in terms of profit and capital efficiency? Here is an overview of the best Dividend Achievers with a return on investment of more than 20 percent as well as an operating margin in the same percentage range. Nine companies remained of which five yielding over 2 percent.

10 High Margin Healthcare Dividend Shares

Perfect Healthcare Dividend Stocks With High Margins by Dividend Yield - Stock, Capital, Investment. I screened stocks from the healthcare sector with a positive dividend yield as well as an operating margin of more than 25 percent. Most of the stocks come from the medical instruments and supplies industry but the highest margin stocks are from the drug, biotechnology and diagnostic industry. 5 stocks from the screening results have a yield of more than 3 percent.

Here are the 3 top dividend stocks sorted by yield:

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PDL BioPharma (NASDAQ: PDLI) has a market capitalization of $866.97 million. The company employs 8 people, generates revenues of $344.98 million and has a net income of $91.87 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $193.52 million. Because of these figures, the EBITDA margin is 56.10 percent (operating margin 56.07 percent and the net profit margin finally 26.63 percent).


The total debt representing 178.77 percent of the company’s assets. Twelve trailing months earnings per share reached a value of $0.74. Last fiscal year, the company paid $1.00 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 8.43, Price/Sales 2.51 and Price/Book ratio is not calculable. Dividend Yield: 9.68 percent. The beta ratio is 0.54.

Long-Term Stock History Chart Of PDL BioPharma Inc. (Click to enlarge)

Long-Term History of Dividends from PDL BioPharma Inc. (NASDAQ: PDLI) (Click to enlarge)

Long-Term Dividend Yield History of PDL BioPharma Inc. (NASDAQ: PDLI) (Click to enlarge)

AstraZeneca (NYSE: AZN) has a market capitalization of $61.13 billion. The company employs 61,100 people, generates revenues of $33,269.00 million and has a net income of $8,081.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $13,380.00 million. Because of these figures, the EBITDA margin is 40.22 percent (operating margin 34.55 percent and the net profit margin finally 24.29 percent).


The total debt representing 16.43 percent of the company’s assets and the total debt in relation to the equity amounts to 39.73 percent. Due to the financial situation, a return on equity of 36.71 percent was realized. Twelve trailing months earnings per share reached a value of $7.29. Last fiscal year, the company paid $2.55 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 6.35, Price/Sales 1.78 and Price/Book ratio 2.81. Dividend Yield: 5.83 percent. The beta ratio is 0.62.

Long-Term Stock History Chart Of AstraZeneca plc (ADR) (Click to enlarge)

Long-Term History of Dividends from AstraZeneca plc (ADR) (NYSE: AZN) (Click to enlarge)

Long-Term Dividend Yield History of AstraZeneca plc (ADR) (NYSE: AZN) (Click to enlarge)

Meridian Bioscience (NASDAQ: VIVO) has a market capitalization of $777.02 million. The company employs 525 people, generates revenues of $159.72 million and has a net income of $26.83 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $45.73 million. Because of these figures, the EBITDA margin is 28.63 percent (operating margin 25.06 percent and the net profit margin finally 16.80 percent).


The total debt representing 0.00 percent of the company’s assets and the total debt in relation to the equity amounts to 0.00 percent. Due to the financial situation, a return on equity of 19.45 percent was realized. Twelve trailing months earnings per share reached a value of $0.65. Last fiscal year, the company paid $0.76 in form of dividends to shareholders.


Here are the price ratios of the company: The P/E ratio is 29.03, Price/Sales 4.86 and Price/Book ratio 5.61. Dividend Yield: 4.03 percent. The beta ratio is 0.80.

Long-Term Stock History Chart Of Meridian Bioscience, Inc. (Click to enlarge)

Long-Term History of Dividends from Meridian Bioscience, Inc. (NASDAQ: VIVO) (Click to enlarge)

Long-Term Dividend Yield History of Meridian Bioscience, Inc. (NASDAQ: VIVO) (Click to enlarge)

Here is the full table with some fundamentals (TTM):

10 High Margin Healthcare Dividend Shares (Click to enlarge)

Take a closer look at the full table. The average price to earnings ratio (P/E ratio) amounts to 17.62 while the forward price to earnings ratio is 14.23. The dividend yield has a value of 3.46 percent. Price to book ratio is 4.28 and price to sales ratio 4.17. The operating margin amounts to 37.47 percent.

Related stock ticker symbols:

PDLI, AZN, VIVO, BMY, UTMD, AMGN, TECH, NVO, MLAB, ATRI

Selected Articles:

· Best Healthcare Stock Picks For 2012

· 12 Healthcare Dividend Stocks With Best Future EPS Growth

· 14 Healthcare Dividend Stocks With Biggest Institutional Buys

· 8 Healthcare Dividend Stocks Close to 52-Week Low

* I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.

15 High Yield Large Caps With Best Margin

High Yield Large Capitalized Stocks With Best Operating Margin by Dividend Yield - Stock, Capital, Investment. Here is a current sheet of large capitalized stocks (market capitalization of more than USD 10 billion) with a dividend yield of more than 5 percent and high margins. The operating margin of the observed companies is at least 25 percent. 15 stocks fulfilled these criteria of which 7 have a dividend yield of more than 7 percent.

Here is the table with some fundamentals:

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15 High Yield Large Caps With Best Margin

Take a closer look at the full table of 15 high yield large caps with best margin. The average price to earnings ratio (P/E ratio) amounts to 12.4 while the average forward P/E ratio is 9.6. The dividend yield has an average value of 7.5 percent. Price to book ratio is 3.7 and price to sales ratio 3.1. The operating margin amounts to 34.1 percent.

Related stock ticker symbols:

NLY, STD, TEF, WBK, SCCO, BBVA, SID, MO, AZN, NGG, CHT, RAI, HCP, STO, CM

Selected Articles:

· Best European Dividend Stocks With Margins Over 25 Percent

· 8 Cheap Growth Stocks With High Margins And Dividend Yields

· High Yield Large Caps With Biggest ROE

· 17 Large Cap High Yields Close To 52-Week High

· 14 Big Stocks With High Margins And Dividend Yields