10 Highly Profitable S&P Dividend Stocks

Over the past three days, the S&P 500 index rallied 2.4%, the biggest increase since February. Reasons for the increase include impressive housing data and encouraging earnings data for many companies listed in the index, according to Bloomberg.

Investors were encouraged by earnings data, with over 75% of companies in the S&P 500 beating forecasts, and per-share profits likely to have grown 3.3% in the first quarter (in comparison to 0.8% growth projection from before earnings season began). Michelle Gibley of Charles Schwab said, "Things are better. We did get several months of better-than-expected economic data. The earnings season has been pretty good."

Homebuilder stocks in the index are up, with PulteGroup returning 10% after focusing on cutting costs.

Companies are also increasing dividends and buyback programs using the cash the majority has held on their balance sheets for the past few years. S&P's senior index analyst Howard Silverblatt said, "Given underlying fundamentals, low payouts, and cash reserves, 2012 should set a record high for cash dividend payments."

Business section: Investing ideas                        
Things are looking up after a slide in index levels during this month, and it's partly due to companies making more money than expected. Below is a list of dividend-paying companies listed in the S&P 500 that are more profitable than their peers. Do you think we'll keep seeing an increase?

List sorted by dividend yield. (Click here to access free, interactive tools to analyze these ideas.)

1. Public Service Enterprise Group (NYSE: PEG  ) : Operates in the energy industry primarily in the northeastern and mid Atlantic United States. The company has a market cap of $15.66 billion, most recent closing price at $30.60. Dividend yield at 4.59%, payout ratio at 49.25%. TTM gross margin at 35.11% vs. industry average at 26.28%. TTM operating margin at 26.5% vs. industry average at 17.3%. TTM pre-tax margin at 21.02% vs. industry average at 12.66%.

2. M&T Bank (NYSE: MTB  ) : Operates as the holding company for M&T Bank and M&T Bank, National Association, which provide commercial and retail banking services to individuals, corporations and other businesses, and institutions. The company has a market cap of $11.05 billion, most recent closing price at $86.99. Dividend yield at 3.21%, payout ratio at 45.18%. TTM gross margin at 85.49% vs. industry average at 73.16%. TTM operating margin at 47.53% vs. industry average at 40.39%. TTM pre-tax margin at 27.71% vs. industry average at 22.7%.

3. Analog Devices: 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. The company has a market cap of $11.43 billion, most recent closing price at $38.14. Dividend yield at 3.13%, payout ratio at 36.92%. TTM gross margin at 69.7% vs. industry average at 59.67%. TTM operating margin at 34.37% vs. industry average at 22.76%. TTM pre-tax margin at 33.74% vs. industry average at 21.58%.

4. Intel (Nasdaq: INTC  ) : Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. The company has a market cap of $141.07 billion, most recent closing price at $27.91. Dividend yield at 2.98%, payout ratio at 33.02%. TTM gross margin at 74.58% vs. industry average at 59.67%. TTM operating margin at 31.83% vs. industry average at 22.76%. TTM pre-tax margin at 31.86% vs. industry average at 21.58%.

5. McDonald's: Operates as a foodservice retailer worldwide. The company has a market cap of $97.61 billion, most recent closing price at $98.49. Dividend yield at 2.92%, payout ratio at 48.32%. TTM gross margin at 43.51% vs. industry average at 36.71%. TTM operating margin at 30.76% vs. industry average at 19.2%.TTM pre-tax margin at 29.74% vs. industry average at 17.43%.

6. Xilinx: Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. The company has a market cap of $9.66 billion, most recent closing price at $36.75. Dividend yield at 2.40%, payout ratio at 33.84%. TTM gross margin at 67.03% vs. industry average at 59.67%. TTM operating margin at 29.56% vs. industry average at 22.76%.TTM pre-tax margin at 27.56% vs. industry average at 21.58%.

7. St. Jude Medical: Develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide. The company has a market cap of $12.24 billion, most recent closing price at $38.40. Dividend yield at 2.39%, payout ratio at 34.23%. TTM gross margin at 77.97% vs. industry average at 65.57%. TTM operating margin at 25.06% vs. industry average at 14.13%.TTM pre-tax margin at 17.8% vs. industry average at 11.07%.

8. Hershey: Engages in manufacturing, marketing, selling, and distributing various chocolate and confectionery products, pantry items, and gum and mint refreshment products worldwide. The company has a market cap of $15.01 billion, most recent closing price at $65.96. Dividend yield at 2.28%, payout ratio at 48.29%. TTM gross margin at 45.93% vs. industry average at 32.16%. TTM operating margin at 17.88% vs. industry average at 11.59%.TTM pre-tax margin at 15.83% vs. industry average at 9.2%.

9. Qualcomm (Nasdaq: QCOM  ) : Engages in the development, design, manufacture, and marketing of digital wireless telecommunications products and services. The company has a market cap of $109.56 billion, most recent closing price at $63.44. Dividend yield at 1.56%, payout ratio at 29.89%. TTM gross margin at 69.31% vs. industry average at 59.74%. TTM operating margin at 32.07% vs. industry average at 19.47%.TTM pre-tax margin at 34.86% vs. industry average at 18.95%.

10. Monsanto (NYSE: MON  ) : Provides agricultural products for farmers in the United States and internationally. The company has a market cap of $41.53 billion, most recent closing price at $76.81. Dividend yield at 1.56%, payout ratio at 32.97%. TTM gross margin at 56.43% vs. industry average at 37.13%. TTM operating margin at 22.99% vs. industry average at 17.14%.TTM pre-tax margin at 21.8% vs. industry average at 16.29%.

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 Danny Guttridge does not own any of the shares mentioned above. Profitability data sourced from Fidelity. All other data sourced from Finviz. The Motley Fool owns shares of Qualcomm, Intel, and St. Jude Medical. Motley Fool newsletter services have recommended buying shares of Charles Schwab, Intel, and McDonald's. Motley Fool newsletter services have also recommended creating a modified stock repair against synthetic long position in Monsanto. The Motley Fool has a disclosure policy.
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