High Yield Momentum and Low Payout Stocks for February

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 |  Includes: CMS, CTL, DTE, EQR, FPL-OLD, FTR, MRK, NI, PCG, PEG, PLD, POM, RAI, RRD, TEG, WILN
by: Scott's Investments
Approximately once per month I run a high-yield momentum screen using the free service on Finviz and post the results. Last month's results are here.To reiterate, the screen is more of a trading strategy and less of an income strategy, although the dividends do play an essential component in the overall returns. Thus, turnover could be high and the strategy is not for everyone.
Second, it is a screen and not a recommended or comprehensive portfolio. In other words, there could be sector imbalances so for investors looking to have exposure across different sectors and asset classes, this screen could potentially serve as a starting point for further research or one small piece to a much larger picture.
The first screen looks for high yielding high momentum stocks. I screened the S&P 500 for stocks yielding greater than 4% and then ranked them by 6 month returns. There were 62 results (versus 51 last month) and per a previous article, the highest momentum, high yield stocks have historically been the best performing so I have listed the top 20% (based on 6 month returns) of results, or 12 stocks (rounded). You will see many of the same names on this months list as January's list:

Ticker Company Trend Analysis Dividend Yield Payout Ratio Performance (Half Year) 200-Day SMA Price
PLD ProLogis Here 4.84% 26.66% 15.08% 12.4
DTE DTE Energy Co. Here 5.05% 63.50% 26.28% 17.76% 41.95
TEG Integrys Energy Group, Inc. Here 6.63% 25.02% 19.81% 41.02
WIN Windstream Corporation Here 9.81% 124.99% 24.42% 12.31% 10.19
RRD R.R. Donnelley & Sons Company Here 5.47% 23.67% 9.69% 19.02
MRK Merck & Co. Inc. Here 4.20% 39.91% 22.05% 15.76% 36.2
POM Pepco Holdings, Inc. Here 6.62% 91.17% 20.28% 13.27% 16.31
RAI Reynolds American Inc. Here 6.99% 102.98% 19.89% 14.86% 51.53
EQR Equity Residential Here 4.18% 18.69% 17.61% 32.26
FTR Frontier Communications Corporation Here 13.23% 209.50% 15.77% 7.82% 7.56
CTL Centurytel, Inc. Here 8.00% 109.68% 15.32% 10.03% 35.01
NI Nisource Inc. Here 6.25% 109.51% 14.91% 14.71% 14.72
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The second screen looks for stocks in the S&P 500 yielding greater than 4%, with a payout ratio less than 50%. An explanation of the reasons behind the strategy is here. I have included some additional momentum columns for information purposes. EXC and PEG were on last months list, EXC has been removed from this months list and there are 4 new additions:


Ticker Company Dividend Yield Payout Ratio 200-Day SMA Price
CMS CMS Energy Corp. 4.12% 42.74% 10.57% 14.57
FPL-OLD FPL Group Inc. 4.12% 48.06% -14.29% 45.92
MRK Merck & Co. Inc. 4.20% 39.91% 15.76% 36.2
PCG PG & E Corp. 4.09% 47.50% 2.65% 41.05
PEG Public Service Enterprise Group Inc. 4.44% 45.07% -4.32% 29.93
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Author's Disclosure: No positions