20 Most Profitable Dividend Aristocrats
Dividend Yield | May 07, 2013 06:34AM ET
Dividend Aristocrats are some of the best dividend growth stocks with a proven dividend hike series of more than 25 years. But if you are a fundamental investor, you also look for a strength business. Margins are a good indicator for a healthy business.
The margins are important for investors. They show if a company is getting stronger or even weaker within its business area. A very high margin shows that the company has products with a big customer satisfaction and desire. Clients need those products and they pay a high price because they can’t find a better provider.
Sometimes margins are very high due to one-off effects. Basic material companies benefitted from high raw commodity prices. They are in a one-off situation which can also keep up for years.
Today I like to look at the Dividend Aristocrats list and show you the most profitable companies, measured by the highest operating margin. The index has 54 constituents and the top 20 stocks have a margin between 16 and 45 percent. That’s well above the index average. 14 of the results have a current buy or better rating.
The Procter & Gamble (PG) has a market capitalization of $213.10 billion. The company employs 126,000 people, generates revenue of $83.680 billion and has a net income of $9.317 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $16.496 billion. The EBITDA margin is 19.71 percent (the operating margin is 15.88 percent and the net profit margin 11.13 percent).
Financial Analysis: The total debt represents 22.52 percent of the company’s assets and the total debt in relation to the equity amounts to 46.94 percent. Due to the financial situation, a return on equity of 13.86 percent was realized. Twelve trailing months earnings per share reached a value of $3.97. Last fiscal year, the company paid $2.14 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.59, the P/S ratio is 2.56 and the P/B ratio is finally 3.45. The dividend yield amounts to 3.08 percent and the beta ratio has a value of 0.47.
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AFLAC (AFL) has a market capitalization of $25.92 billion. The company employs 8,673 people, generates revenue of $25.364 billion and has a net income of $2.866 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8.357 billion. The EBITDA margin is 32.95 percent (the operating margin is 16.96 percent and the net profit margin 11.30 percent).
Financial Analysis: The total debt represents 3.32 percent of the company’s assets and the total debt in relation to the equity amounts to 27.24 percent. Due to the financial situation, a return on equity of 19.82 percent was realized. Twelve trailing months earnings per share reached a value of $6.33. Last fiscal year, the company paid $1.34 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 8.78, the P/S ratio is 1.02 and the P/B ratio is finally 1.62. The dividend yield amounts to 2.53 percent and the beta ratio has a value of 1.88.
Automatic Data Processing (ADP) has a market capitalization of $33.33 billion. The company employs 57,000 people, generates revenue of $10.665 billion and has a net income of $1.388 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2.343 billion. The EBITDA margin is 21.97 percent (the operating margin is 19.90 percent and the net profit margin 13.02 percent).
Financial Analysis: The total debt represents 0.05 percent of the company’s assets and the total debt in relation to the equity amounts to 0.27 percent. Due to the financial situation, a return on equity of 22.90 percent was realized. Twelve trailing months earnings per share reached a value of $2.86. Last fiscal year, the company paid $1.55 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.01, the P/S ratio is 3.15 and the P/B ratio is finally 5.48. The dividend yield amounts to 2.51 percent and the beta ratio has a value of 0.67.
Sigma-Aldrich (SIAL) has a market capitalization of $9.47 billion. The company employs 9,000 people, generates revenue of $2.623 billion and has a net income of $460.00 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $795.00 million. The EBITDA margin is 30.31 percent (the operating margin is 25.12 percent and the net profit margin 17.54 percent).
Financial Analysis: The total debt represents 17.88 percent of the company’s assets and the total debt in relation to the equity amounts to 26.83 percent. Due to the financial situation, a return on equity of 19.39 percent was realized. Twelve trailing months earnings per share reached a value of $3.82. Last fiscal year, the company paid $0.80 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 20.64, the P/S ratio is 3.62 and the P/B ratio is finally 3.72. The dividend yield amounts to 1.09 percent and the beta ratio has a value of 0.94.
Take a closer look at the full list of the 20 most profitable Dividend Aristocrats. The average P/E ratio amounts to 18.47 and forward P/E ratio is 15.69. The dividend yield has a value of 2.40 percent. Price to book ratio is 5.46 and price to sales ratio 3.36. The operating margin amounts to 24.03 percent and the beta ratio is 0.83. Stocks from the list have an average debt to equity ratio of 0.72.
Here is the full table with some fundamentals (TTM):
Related stock ticker symbols:
TROW, HCP, BEN, MCD, MHP, MDT, SIAL, BCR, KO, MMM, CL, BDX, ADP, JNJ,
ED, CVX, PG, AFL, ITW, CB
Disclosure: I am MCD, MDT, SIAL, KO, MMM, CL, BDX, ADP, JNJ, PG, ITW. I receive no compensation to write about these specific stocks, sector or theme. I don't plan to increase or decrease positions or obligations within the next 72 hours.
For the other stocks: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I receive no compensation to write about any specific stock, sector or theme.
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