November and December jobless claims have decreased in the U.S., and a slew of other economic data released Thursday suggests the U.S. recovery is picking up. There's still work to do, but the U.S. can take some solace in the fact that its economy is "expanding moderately."
Take a look at some key data points, referenced from Reuters:
Unemployment -- fighting the good fight
New U.S. claims for unemployment benefits dropped to a 3.5-year low last week, according to a government report. Initial claims for state unemployment benefits dropped by 19,000 to a seasonally adjusted 366,000.
Although unemployment remains high, analysts say unemployment below 350,000 "signals labor market strength."
A separate report showed inflation remained in check in November, although wholesale prices rose moderately. Retail sales rose modestly in November, which is in "sharp contrast to Europe" where sovereign debt cripples spending.
Still work to do
According to Reuters, the number of Americans on emergency unemployment benefits increased 254,642 to 3.05 million in the week ended Nov. 26.
During that time, the number of people claiming unemployment benefits under all programs rose by 874,670 to a total of 7.45 million.
Investing ideas
America is not in the clear yet. The greatest hurdle will come from the EU, which has yet to succeed or fail in its mission to solve its debt crisis. Its actions and outcome pose heavy risks for the U.S. economy.
In times of uncertainty, many investors turn to dividend stocks. Although past dividends are not a guarantee of future payment, investors looking for steady income may do well by turning to big companies with strong profitability.
To provide you with a starting-off point, we screened the S&P500 index for those paying dividends (yields above 1%) and beating their industry peers on the basis of trailing twelve month (TTM) gross, operating, and pre-tax margins.
Do you think these profitable dividend companies can offer the kind of stability income investors are looking for?
List sorted by difference in gross margin. (Click here to access free, interactive tools to analyze these ideas.)
1. Prudential Financial (NYSE: PRU ) : Prudential Financial, through its subsidiaries, offers various financial products and services in the United States, Asia, Europe, and Latin America. Market cap of $22.61B. Dividend yield at 3.03%. TTM gross margin at 26.76% vs. industry gross margin at 14.26%. TTM operating margin at 12% vs. industry operating margin at 11.39%. TTM pre-tax margin at 10.09% vs. industry pre-tax margin at 10.08%.
2. International Game Technology (NYSE: IGT ) : Designs, manufactures, and markets electronic gaming equipment and systems worldwide. Market cap of $4.72B. Dividend yield at 1.51%. TTM gross margin at 66.48% vs. industry gross margin at 37.35%. TTM operating margin at 27.10% vs. industry operating margin at 19.65%. TTM pre-tax margin at 21.89% vs. industry pre-tax margin at 18.06%.
3. Pall Corp. (NYSE: PLL ) : Pall Corporation manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide. Market cap of $6.44B. Dividend yield at 1.25%. TTM gross margin at 53.53% vs. industry gross margin at 32.36%. TTM operating margin at 17.16% vs. industry operating margin at 12.94%. TTM pre-tax margin at 14.59% vs. industry pre-tax margin at 11.06%.
4. Patterson Companies (Nasdaq: PDCO ) : Operates as a distributor serving the dental, companion-pet veterinarian, and rehabilitation supply markets in North America. Market cap of $3.38B. Dividend yield at 1.68%. TTM gross margin at 34.22% vs. industry gross margin at 21.05%. TTM operating margin at 10.61% vs. industry operating margin at 8.43%. TTM pre-tax margin at 9.92% vs. industry pre-tax margin at 6.79%.
5. Snap-on (NYSE: SNA ) : Snap-on Incorporated manufactures and markets tools, diagnostics, equipment, software, and service solutions for professional users in the United States, the United Kingdom, Canada, Germany, Japan, France, Australia, Spain, the Netherlands, Italy, China, and Sweden. Market cap of $2.85B. Dividend yield at 2.77%. TTM gross margin at 51.72% vs. industry gross margin at 32.36%. TTM operating margin at 15.10% vs. industry operating margin at 12.94%. TTM pre-tax margin at 13.32% vs. industry pre-tax margin at 11.06%.
6. Paychex (Nasdaq: PAYX ) : Provides payroll, human resource, and benefits outsourcing solutions for small-to medium-sized businesses in the United States and Germany. Market cap of $10.64B. Dividend yield at 4.36%. TTM gross margin at 73.30% vs. industry gross margin at 48.44%. TTM operating margin at 38.29% vs. industry operating margin at 26.61%. TTM pre-tax margin at 38.57% vs. industry pre-tax margin at 26.63%.
7. Sigma-Aldrich (Nasdaq: SIAL ) : Develops, manufactures, purchases, and distributes a range of chemicals, biochemicals, and equipment worldwide. Market cap of $7.51B. Dividend yield at 1.15%. TTM gross margin at 56.68% vs. industry gross margin at 37.79%. TTM operating margin at 25.68% vs. industry operating margin at 17.35%. TTM pre-tax margin at 24.59% vs. industry pre-tax margin at 16.33%.
8. Monsanto (NYSE: MON ) : Provides agricultural products for farmers in the United States and internationally. Market cap of $36.63B. Dividend yield at 1.75%. TTM gross margin at 56.62% vs. industry gross margin at 37.79%. TTM operating margin at 21.19% vs. industry operating margin at 17.43%. TTM pre-tax margin at 20.08% vs. industry pre-tax margin at 16.42%.
9. Aon (NYSE: AON ) : Provides risk management, insurance and reinsurance brokerage, and human resource consulting and outsourcing services in the United States and internationally. Market cap of $14.62B. Dividend yield at 1.33%. TTM gross margin at 21.02% vs. industry gross margin at 14.26%. TTM operating margin at 16% vs. industry operating margin at 11.39%. TTM pre-tax margin at 12.14% vs. industry pre-tax margin at 10.10%. R
10. The McGraw-Hill Companies (NYSE: MHP ) : Provides various information services for financial, educational, and business information markets worldwide. Market cap of $12.46B. Dividend yield at 2.35%. TTM gross margin at 61.84% vs. industry gross margin at 42.38%. TTM operating margin at 23.45% vs. industry operating margin at 18.75%. TTM pre-tax margin at 22.02% vs. industry pre-tax margin at 14.93%.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Rebecca Lipman does not own any of the shares mentioned above. Profitability data sourced from Fidelity. All other data sourced from Finviz.
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