5 Highly Profitable Cash Rich Dividend Stocks

We had high standards in mind while creating the list below. At the forefront of the process was a strong and protected dividend yield.

It was decided we would screen for dividend stocks with exceptional profit margins and the extra cash on hand to continue payments come hell or high water.

Here’s how we screened:

First, we looked for highly profitable companies. We measure this as stronger trailing twelve month (TTM) operating, gross and pretax margins than the average of their industry peers.

Secondly, we looked at cash and short term investments on hand relative to the company’s quarterly operating expenses, as averaged over 5 quarters. We took only the companies with cash holdings that exceed 4 times the average quarterly operating expense.

In other words, all of these companies could function for more than four quarters without generating any revenue. This is especially important in uncertain times.  If sales hit the fan in a bad way, it’s important to know that these firms are liquid enough to withstand a couple rough patches. It is also a healthy sign that they could then be headed towards expansion or even increase their dividend yield.

Business Section: Investing Ideas

5 stocks made the list. We list them in detail here.

Interactive chart: Compare the dividend yields of the stocks below:

Do you think these are reliable dividend stocks? Let this be a starting point for your own analysis:

1. Calamos Asset Management Inc. ( CLMS): Provides investment advisory services to individuals including high net worth individuals, and institutions. Market cap at $211.65M, most recent closing price at $10.38.Dividend yield at 4.24%. Average quarterly operating expense over the last five quarters at $52.65M, vs. most recent cash and short term investments at $498.68M, implies a Cash / Avg. Operating Expense ratio at 9.47. TTM gross margin at 56.52% vs. industry average at 38.81%. TTM operating margin at 36.93% vs. industry average at 27.06%. TTM pretax margin at 42.68% vs. industry average at 25.35%

 

2. Analog Devices Inc. ( ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. Market cap at $12.63B, most recent closing price at $41.89.Dividend yield at 2.86%. Average quarterly operating expense over the last five quarters at $471.59M, vs. most recent cash and short term investments at $3900.38M, implies a Cash / Avg. Operating Expense ratio at 8.27. TTM gross margin at 68.52% vs. industry average at 60.%. TTM operating margin at 30.85% vs. industry average at 20.03%. TTM pretax margin at 30.12% vs. industry average at 20.53%.

 

3. Xilinx Inc. ( XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. Market cap at $9.34B, most recent closing price at $35.78.Dividend yield at 2.46%. Average quarterly operating expense over the last five quarters at $399.97M, vs. most recent cash and short term investments at $1706.46M, implies a Cash / Avg. Operating Expense ratio at 4.27. TTM gross margin at 68.54% vs. industry average at 60.%. TTM operating margin at 27.89% vs. industry average at 20.03%. TTM pretax margin at 25.64% vs. industry average at 20.53%.

 

4. Altera Corp. ( ALTR): Designs, manufactures, and markets programmable logic devices (plds); structured application-specific integrated circuit devices; predefined design building blocks or intellectual-property cores; and associated development tools. Market cap at $11.01B, most recent closing price at $34.34.Dividend yield at 1.16%. Average quarterly operating expense over the last five quarters at $302.53M, vs. most recent cash and short term investments at $3052.18M, implies a Cash / Avg. Operating Expense ratio at 10.09. TTM gross margin at 71.69% vs. industry average at 60.%. TTM operating margin at 33.52% vs. industry average at 20.03%. TTM pretax margin at 34.09% vs. industry average at 20.53%.

 

5. Mastercard Incorporated ( MA): Provides transaction processing and related services to customers principally in support of their credit, deposit access, electronic cash and automated teller machine payment card programs, and travelers’ cheque programs. Market cap at $60.62B, most recent closing price at $487.87.Dividend yield at 0.25%. Average quarterly operating expense over the last five quarters at $1002.4M, vs. most recent cash and short term investments at $5675M, implies a Cash / Avg. Operating Expense ratio at 5.66. TTM gross margin at 55.9% vs. industry average at 49.35%. TTM operating margin at 52.85% vs. industry average at 28.88%. TTM pretax margin at 41.89% vs. industry average at 21.26%.

 

 

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

 

Written by Kapitall’s Rebecca Lipman

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