For conservative income oriented equity investors, high quality stocks exhibiting low volatility, yields greater than the broad indexes, and consistent dividend growth are key.
The intersection of constituents of those three index ETFs is one good place to look for stocks that may be suitable for your purposes.
SPHQ has 130 constituents. SPLV has 100, and SDY has 86. However, we limited our search in this situation to only those SDY constituents that are in the S&P 500. That number is 56.
Between those 3 ETFs there are 22 stocks that are held in each of the ETFs. Of those, only 14 have a yield above 2%, which is approximately the yield of the S&P 500 (proxy SPY).
The 5 of those 14 most highly rated by ThomsonReuters StarMine for year ahead performance on a 0-10 scale are:
|XOM||Exxon Mobil Corporation||9.8||2.8%|
|WMT||Wal-Mart Stores Inc||9.6||2.4%|
|JNJ||Johnson & Johnson||9.2||3.1%|
We currently own JNJ and KMB from this list.
For comparison, this table provides the yield of the three ETFs and SPY:
Here are three rate of change operational comparisons of the stocks: revenue, cash flow from operations and dividends per share.
All charts are courtesy of www.YCharts.com
Here are 10-year price rate of change comparisons for the 5 stocks, followed by 1-year price rate of change comparisons for the 3 ETFs plus SPY (long-term price data on all of the ETFs not available due to recent inception dates):
Here are three valuation comparisons of the stocks: EV/EBIDTA, P/E based on average of last 10 years of earnings, and P/B.
Disclosure: QVM has positions in JNJ and KMB as of the creation date of this article (May 6, 2013). We certify that except as cited herein, this is our work product. We received no compensation or other inducement from any party to produce this article, but are compensated retroactively by Seeking Alpha based on readership of this specific article.
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