Q4 earnings season has begun, do you have a watch list prepared?

For a starting point, we ran a screen on next week’s reporting companies for those with high dividend yields and high profitability, beating their industry peers on trailing twelve month (TTM) gross, operating, and pretax margins.

[Related:  13 Stocks Reporting Earning Next Week With a History of Positive Surprises]

Profitability Details

To analyze profitability, we compared the companies’ gross, operating, and profit margins with their industry averages to find those more profitable than their industry peers.

TTM Gross margin: This metric that tells us the percentage of a company’s revenue is left after paying all production expenses. Costs include overhead, payroll and taxation. ((revenues – cost of goods sold) / Revenue ) *100 = Gross margin %

TTM Operating margin: This tells us the percentage remaining after all operating expenses are paid. Operating expenses include: supplies, repairs, research and development, and depreciation. (Operating Income / Net Operating Revenue) *100 = Operating Margin %

TTM Pretax margin: A company’s earnings before taxes. This incorporates all of the expenses associated with business excluding taxes. It can help to determine the overall operating efficiency of the firm. The higher the pretax margin, the more profitable the company. (Net profit before taxes / net sales) *100 = Pretax Margin   

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Business Section: Investing Ideas

The following list of stocks meet all of these criteria:

- Dividend yield between 3-7% (high yield)
- More profitable than their industry average

In addition,

- Market cap over $50 million
- Share price above $1
- Reporting earnings next week

How do you think these stocks will fare next week in their earnings announcements?

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

Interactive Chart: Press play to see how the dividend yields have changed for these three companies over the past two years.

1. CVB Financial Corp. (CVBF): Operates as a bank holding company for Citizens Business Bank that provides various retail banking and financial services to small to mid-sized businesses, high net-worth individuals, and professionals in the United States. Market cap at $1.16B, most recent closing price at $11.08.

Dividend yield at 3.07%. Earnings date 01/16/13.

TTM gross margin at 89.85% vs. industry average at 72.35%. TTM operating margin at 58.05% vs. industry average at 46.65%. TTM pretax margin at 39.62% vs. industry average at 22.32%.


2. Intel Corporation (INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap at $106.74B, most recent closing price at $21.45.

Dividend yield at 4.2%. Earnings date 01/17/13.

TTM gross margin at 76.44% vs. industry average at 59.67%. TTM operating margin at 29.92% vs. industry average at 19.83%. TTM pretax margin at 30.24% vs. industry average at 20.34%.


3. Kinder Morgan Energy Partners LP (KMP): Owns and manages energy transportation and storage assets. Market cap at $31.5B, most recent closing price at $86.30.

Dividend yield at 5.84%. Earnings date 01/14/13.

TTM gross margin at 45.42% vs. industry average at 31.98%. TTM operating margin at 26.85% vs. industry average at 15.87%. TTM pretax margin at 23.97% vs. industry average at 16.26%.



( List compiled by Kapitall’s Rebecca Lipman)