9 Highly Liquid Dividend Stocks With Strong Sources Of Profitability

Do you prefer stocks that pay part of their return in dividend income? We ran a screen on stocks paying dividend yields above 1% and sustainable payout ratios below 50%. We then screened for those with strong company liquidity, measured by current ratios over 3. Liquidity can support a dividend payment when a company's profits temporarily dip. Finally, we ran DuPont analysis on the names to find those with strong sources of profitability. DuPont analyzes return on equity (net income/equity) profitability by breaking ROE up into three components: ROE = (Net Profit/Equity) = (Net profit/Sales)*(Sales/Assets)*(Assets/Equity) = (Net Profit margin)*(Asset turnover)*(Leverage ratio) It therefore focuses on companies with the following positive characteristics: Increasing ROE along with, •Decreasing leverage, (i.e. decreasing Asset/Equity ratio) •Improving asset use efficiency (i.e. increasing Sales/Assets ratio) and improving net profit margin (i.e. increasing Net Income/Sales ratio) Companies with all of these characteristics are experiencing increasing profits due... Read more