8 SP500 Dividend Stocks With Encouraging DuPont Trends

Do you prefer stocks that pay reliable dividend income? For ideas on how to start your own dividend stock search, we ran a screen.

We began by screening the S&P 500 for stocks paying dividend yields above 1%.

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:

Return on Equity (ROE)  = (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net Profit margin)*(Asset turnover)*(Leverage ratio)

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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)

Interactive Chart: Compare changes in dividend yield over the past two years:

 

Do you think these stocks pay reliable dividends? Use this list as a starting point for your own analysis.

Analyze These Ideas: Access a  performance overview for all stocks in the list

 

1. Avalonbay Communities Inc. ( AVB): Engages in the development, redevelopment, acquisition, ownership, and operation of multifamily communities in the United States. Market cap at $14.93B, most recent closing price at $133.07.

MRQ net profit margin at 31.94% vs. 18.39% y/y. MRQ sales/assets at 0.03 vs. 0.029 y/y. MRQ assets/equity at 1.901 vs. 2.046 y/y.

2. CBS Corporation ( CBS): Operates as a mass media company in the United States and internationally. Market cap at $22.77B, most recent closing price at $35.84.

MRQ net profit margin at 11.44% vs. 10.04% y/y. MRQ sales/assets at 0.13 vs. 0.129 y/y. MRQ assets/equity at 2.565 vs. 2.638 y/y.

3. Costco Wholesale Corporation ( COST): Operates membership warehouses that offer a selection of branded and private label products in a range of merchandise categories in no-frills, self-service warehouse facilities. Market cap at $42.51B, most recent closing price at $98.31.

MRQ net profit margin at 1.89% vs. 1.7% y/y. MRQ sales/assets at 1.187 vs. 1.053 y/y. MRQ assets/equity at 2.196 vs. 2.23 y/y.

4. Cintas Corporation ( CTAS): Provides corporate identity uniforms and related business services in North America and Latin America, Europe, and Asia. Market cap at $5.23B, most recent closing price at $41.85.

MRQ net profit margin at 7.3% vs. 6.75% y/y. MRQ sales/assets at 0.253 vs. 0.246 y/y. MRQ assets/equity at 1.927 vs. 1.952 y/y.

5. Dr Pepper Snapple Group, Inc. ( DPS): Engages in the manufacture and distribution of non-alcoholic beverages in the United States, Canada, and Mexico. Market cap at $9.48B, most recent closing price at $45.54.

MRQ net profit margin at 11.71% vs. 10.07% y/y. MRQ sales/assets at 0.17 vs. 0.166 y/y. MRQ assets/equity at 3.878 vs. 4.073 y/y.

6. Equifax Inc. ( EFX): Collects, organizes, and manages various financial, demographic, employment, and marketing information solutions for businesses and consumers. Market cap at $6.48B, most recent closing price at $54.17.

MRQ net profit margin at 14.32% vs. 13.6% y/y. MRQ sales/assets at 0.151 vs. 0.14 y/y. MRQ assets/equity at 1.94 vs. 1.989 y/y.

7. Federated Investors, Inc. ( FII): Provides its services to individuals, including high net worth individuals, banking or thrift institutions, investment companies, pension and profit sharing plans, pooled investment vehicles, charitable organizations, state or municipal government entities, and registered investment advisors. Market cap at $2.11B, most recent closing price at $20.28.

MRQ net profit margin at 23.39% vs. 17.9% y/y. MRQ sales/assets at 0.198 vs. 0.187 y/y. MRQ assets/equity at 1.944 vs. 2.165 y/y.

8. General Electric Company ( GE): Operates as a technology, service, and finance company worldwide. Market cap at $225.56B, most recent closing price at $21.51.

MRQ net profit margin at 9.6% vs. 9.12% y/y. MRQ sales/assets at 0.052 vs. 0.048 y/y. MRQ assets/equity at 5.703 vs. 5.927 y/y.

 

 

Written by Kapitall’s Sabina Bhatia

 

 

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