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In order to create a dividend stock portfolio that can outperform the market by a big margin, I have used the following screen. It is based on attempt to search for highly profitable companies that pay rich dividends and that have raised their payouts at a high rate for the last five years. Those companies also would have to show a very low debt and a very low payout ratio.

The screen's method that I use to build this portfolio requires all stocks to comply with all following demands:

  1. The stock does not trade over-the-counter (OTC).
  2. Dividend yield is greater than 2.0%.
  3. The annual rate of dividend growth over the past five years is greater than 5%.
  4. The payout ratio is less than 75%.
  5. Forward P/E is less than 15.
  6. Total debt to equity is less than 0.40.
  7. The twenty stocks with the lowest payout ratio among all the stocks that complied with the first six demands.

I used the Portfolio123's powerful screener to perform the search and to run back-tests. Nonetheless, the screening method should only serve as a basis for further research. All the data for this article were taken from Yahoo Finance, Portfolio123 and finviz.com.

After running this screen on December 27, 2013, before the market open, I discovered the following twenty stocks:


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The table below presents the dividend yield, the payout ratio, the forward P/E and the total debt to equity for the twenty companies.


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Helmerich & Payne Inc. (NYSE:HP)

Helmerich & Payne, Inc. engages in the contract drilling of oil and gas wells.


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Source: Bank of America Merrill Lynch Energy Conference

Helmerich & Payne has a very low debt (total debt to equity is only 0.04), and it has a very low trailing P/E of 12.48 and a low forward P/E of 13.61. The price-to-book value is at 1.99, and the average annual earnings growth estimates for the next five years is at 7.5%. The forward annual dividend yield is at 2.41%, and the payout ratio is only 12.9%. The annual rate of dividend growth over the past three years was very high at 60.61% and over the past five years was also very high at 36.29%.

The HP stock price is 3.91% above its 20-day simple moving average, 6.06% above its 50-day simple moving average and 23.19% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Helmerich & Payne has recorded strong revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

The tables below emphasize the Helmerich & Payne's superior margins and return on capital parameters over the industry median, the sector median and the S&P 500 median.


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Source: Portfolio123

Helmerich & Payne has increased its market share by an impressive rate, as shown in the chart below.


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Source: Bank of America Merrill Lynch Energy Conference

On November 14, Helmerich & Payne reported its fourth-quarter fiscal 2013 financial results, which beat EPS expectations by $0.06 and was in-line on revenues. The company reported record income from continuing operations of $721.5 million ($6.65 per diluted share) and record operating revenues of $3.4 billion for its fiscal year ended September 30, 2013, compared to income from continuing operations of $573.6 million ($5.27 per diluted share) from operating revenues of $3.2 billion during the prior fiscal year ended September 30, 2012.

Helmerich & Payne has recorded strong revenue, EPS and dividend growth, and it continues to capture market share. Considering its good valuation metrics, HP stock can move higher. Furthermore, the rich dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include a downturn in the U.S. economy, and lower oil and natural gas prices.


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Chart: finviz.com

ACE Limited (NYSE:ACE)

ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to insured worldwide. The company was founded in 1985 and is headquartered in Zurich, Switzerland.

ACE Limited has a very low debt (total debt to equity is only 0.21), and it has a very low trailing P/E of 10.02 and a very low forward P/E of 12.22. The price to free cash flow is very low at 11.55, and the average annual earnings growth estimates for the next five years is at 7.37%. The forward annual dividend yield is at 2.04%, and the payout ratio is only 18.35%. The annual rate of dividend growth over the past three years was quite high at 15.67% and over the past five years was at 11.80%.

The ACE stock price is 1.68% above its 20-day simple moving average, 3.84% above its 50-day simple moving average and 11.19% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

ACE Limited has recorded moderate revenue and EPS growth and strong dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

On October 22, ACE Limited reported its latest quarter financial results, which beat EPS expectations by $0.26. The company reported net income for the quarter ended September 30, 2013, of $2.66 per share, compared with $1.86 per share for the same quarter last year. Operating income was $2.49 per share, compared with $2.01 per share for the same quarter last year. Book value and tangible book value per share increased 3.4% and 3.9%, respectively, from June 30, 2013. Book value and tangible book value per share now stand at $82.98 and $66.91, respectively. Operating return on equity for the quarter was 13.0%. The property and casualty combined ratio for the quarter was 86.5%.

ACE Limited has recorded revenue, EPS and dividend growth, and considering its cheap valuation metrics, its solid earnings growth prospects, and the fact that the stock is in an uptrend, ACE stock can move higher. Furthermore, the rich growing dividend represents a nice income.


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Chart: finviz.com

AFLAC Inc (NYSE:AFL)

Aflac Incorporated, through its subsidiary, American Family Life Assurance Company of Columbus, provides supplemental health and life insurance products.

Aflac Incorporated has a low debt (total debt to equity is only 0.34), and it has a very low trailing P/E of 10.26 and a very low forward P/E of 10.54. The price to free cash flow for the trailing 12 months is very low at 3.11, and the average annual earnings growth estimates for the next five years is at 1.25%. The forward annual dividend yield is at 2.21%, and the payout ratio is only 21.3%. The annual rate of dividend growth over the past three years was at 7.70% and over the past five years was at 7.83%.

The AFL stock price is 1.48% above its 20-day simple moving average, 1.75% above its 50-day simple moving average and 13.56% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Aflac has recorded strong revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

On October 29, Aflac reported its third-quarter financial results, which was in-line on EPS and in-line on revenues. Reflecting the weaker yen/dollar exchange rate, total revenues fell 14.0% to $5.9 billion during the third quarter of 2013, compared with $6.8 billion in the third quarter of 2012. Net earnings were $702 million, or $1.50 per diluted share, compared with $1.0 billion, or $2.16 per share, a year ago.

Aflac has recorded strong revenue, EPS and dividend growth, and considering its compelling valuation metrics and the fact that the stock is in an uptrend, AFL stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Since a significant portion of Aflac's business is in Japan, where the functional currency is the yen, the impact from translating yen into dollars might reduce Aflac's operating earnings, in case of decrease in the exchange rate of the yen.


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Chart: finviz.com

Canadian Natural Resources Limited (NYSE:CNQ)

Canadian Natural Resources Limited engages in the exploration, development, production and marketing of crude oil, natural gas liquids, and natural gas.

Canadian Natural Resources has a low debt (total debt to equity is only 0.37), and it has a trailing P/E of 17.54 and a very low forward P/E of 11.78. The PEG ratio is very low at 0.84, and the average annual earnings growth estimates for the next five years is very high at 20.90%. The forward annual dividend yield is at 2.30%, and the payout ratio is only 22.7%. The annual rate of dividend growth over the past three years was very high at 20.89% and over the past five years was also very high at 19.97%.

The CNQ stock price is 2.60% above its 20-day simple moving average, 4.01% above its 50-day simple moving average and 8.53% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Canadian Natural Resources has recorded revenue, EPS and dividend growth, during the last three years, as shown in the table below.

Canadian Natural Resources' margins have been much better than that of the industry median, the sector median and the S&P 500 median, as shown in the table below.


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Most of Canadian Natural Resources' stock valuation parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the table below.


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On November 07, Canadian Natural Resources reported its third-quarter financial results, which beat EPS expectations by $0.02 and beat on revenues. In the report, Steve Laut, President of Canadian Natural stated:

We achieved excellent results this quarter both operationally and financially, which demonstrates our ability to execute on our strategy to deliver premium value and defined growth. Our experienced team, together with our strong and diverse asset base, continues to maximize shareholder value in the near-, mid- and long-term. As a result of this continued strength in the Company's results and successful execution to date on the Horizon project expansion, the Company's Board of Directors have increased, commencing with Q4/13, the quarterly dividend to $0.20 per share, an increase of 60% over the previous quarterly dividend, to $0.80 per share per year.

Canadian Natural Resources has recorded revenue, EPS and dividend growth, and considering its cheap valuation metrics, its strong earnings growth prospects, and the fact that the stock is in an uptrend, CNQ stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain and to the solid dividend payment include; a downturn in the U.S. economy, and a decline in the price of oil and natural gas.


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Chart: finviz.com

Travelers Companies Inc. (NYSE:TRV)

The Travelers Companies, Inc., through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States.


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Source: Q3 2013 Presentation

The Travelers has a very low debt (total debt to equity is only 0.26), and it has a very low trailing P/E of 11.50 and a very low forward P/E of 11.05. The price to free cash flow for the trailing 12 months is low at 12.63, and the average annual earnings growth estimates for the next five years is at 8.27%. The forward annual dividend yield is at 2.22%, and the payout ratio is only 24.2%. The annual rate of dividend growth over the past five years was quite high at 10.77%.

The TRV stock price is 1.82% above its 20-day simple moving average, 2.93% above its 50-day simple moving average and 7.68% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

On October 22, The Travelers reported its third-quarter financial results, which beat EPS expectations by $0.30 and was in-line on revenues.

Third-Quarter Highlights

  • Record Quarterly Operating Income per Diluted Share of $2.35, Up 6% from Prior Year Quarter.
  • Return on Equity and Operating Return on Equity of 13.9% and 15.2%, Respectively.
  • Strong net and operating income of $864 million and $883 million, respectively, generally consistent with the prior year quarter.
  • Continued improvement in underlying underwriting margins.
  • Written rate gains continued to exceed expected loss cost trends in all segments.
  • Total capital returned to shareholders of $985 million in the quarter, including $800 million in share repurchases. Year-to-date total capital returned to shareholders of $1.952 billion.
  • Board of Directors authorizes an additional $5.0 billion of share repurchases.
  • Increase in book value per share of 1% to $68.15 and increase in adjusted book value per share of 8% to $63.87 from year-end 2012.

The Travelers has compelling valuation metrics and good earnings growth prospects, and considering its good latest quarter financial results and the fact that the stock is in an uptrend, TRV stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy and extreme weather events.


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Source: Q3 2013 Presentation


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Chart: finviz.com

Horace Mann Educators Corp. (NYSE:HMN)

Horace Mann Educators Corporation, through its subsidiaries, operates as a multi-line insurance company in the United States.


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Source: company presentation

Horace Mann Educators has a very low debt (total debt to equity is only 0.22), and it has a very low trailing P/E of 12.04 and a low forward P/E of 14.18. The price-to-book value is low at 1.16, and the average annual earnings growth estimates for the next five years is at 8%. The forward annual dividend yield is at 2.47%, and the payout ratio is only 28.4%. The annual rate of dividend growth over the past three years was very high at 34.68% and over the past five years was at 13.22%.

The HMN stock price is 3.45% above its 20-day simple moving average, 7.19% above its 50-day simple moving average and 21.61% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Analysts recommend the stock. Among the two analysts covering the stock, one rates it as a strong buy and one rates it as a buy.

Horace Mann Educators has recorded strong EPS and dividend growth and moderate revenue growth during the last year, the last three years and the last five years, as shown in the table below.

On October 22, Horace Mann reported its third-quarter results. EPS came in at $0.59, in-line with analyst expectations. In the report, Horace Mann's President and CEO Marita Zuraitis said:

Horace Mann's third quarter operating income was $0.59 per share, a solid result across all three business segments of our multiline insurance platform. Compared to the third quarter and first nine months of 2012, property and casualty written premiums increased 4%, while the year-to-date combined ratio was in line with our expectations. In our annuity segment, assets under management increased 11% over prior year, and the interest spread remained just below 2%. In the life segment, third quarter sales of Horace Mann products increased significantly compared to a year earlier, with the growth in earnings reflecting better than anticipated mortality losses. Primarily due to stronger than anticipated earnings in our annuity and life segments and lower than expected third quarter catastrophe losses, we are revising our estimate of full-year 2013 operating income to between $1.95 and $2.05 per share.

Horace Mann Educators has recorded strong EPS and dividend growth, and considering its cheap valuation metrics, its good earnings growth prospects, and the fact that the stock is in an uptrend, HMN stock can move higher. Furthermore, the rich growing dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy, and higher-than-anticipated level of catastrophe losses.


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Chart: finviz.com

AXIS Capital Holdings Limited (NYSE:AXS)

AXIS Capital Holdings Limited provides specialty lines insurance and treaty reinsurance products worldwide.

AXIS Capital has a very low debt (total debt to equity is only 0.19) and it has a very low trailing P/E of 11.15 and a very low forward P/E of 10.01. The price to free cash flow for the trailing 12 months is very low at 5.40, and the average annual earnings growth estimates for the next five years is at 5.02%. The price-to-cash ratio is low at 5.02, and the price-to-book-value is also low at 1.02. The forward annual dividend yield is at 2.29%, and the payout ratio is only 29.2%. The annual rate of dividend growth over the past five years was at 6.20%.

AXIS Capital Holdings has recorded good revenue, EPS and dividend growth, during the last three years, as shown in the table below.

Most of AXIS Capital Holdings' stock valuation parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the table below.


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On October 30, AXIS Capital reported its third-quarter financial results. EPS came in at $1.74 a $0.53 better than analyst expectations.

Third-Quarter Highlights

  • Gross premiums written increased 7% to $905 million, with growth of 9% in our insurance segment and 4% in our reinsurance segment;
  • Net premiums written increased 10% to $716 million;
  • Net premiums earned increased 10% to $945 million;
  • Combined ratio of 86.3%, compared to 85.3%;
  • Current accident year loss ratio of 61.5%, compared to 58.3%;
  • Estimated natural catastrophe and weather-related pre-tax net losses (net of reinstatement premiums) of $51 million;
  • Net favorable prior year reserve development of $80 million (benefiting the combined ratio by 8.4 points), compared with $60 million (benefiting the combined ratio by 7.0 points);
  • Net investment income was comparable at $103 million;
  • Pre-tax total return on cash and investments of 1.4%, compared to 2.1%;
  • Net income available to common shareholders of $137 million, compared to $223 million;
  • Operating income of $197 million, compared to $201 million;
  • Net cash flows from operations of $432 million, compared to $424 million;
  • No share repurchases during the quarter;
  • Diluted book value per common share of $44.60, a 5% increase during the quarter and a 2% increase over the last 12 months; and
  • A.M. Best upgraded the financial strength rating of each of our operating (re)insurance subsidiaries to a financial strength rating of A+ (Superior) in September 2013.

AXIS Capital has recorded good revenue, EPS and dividend growth, and considering its compelling valuation metrics and its solid earnings growth prospects, AXS stock can move higher. Furthermore, the rich dividend represents a nice income.

Risks to the expected capital gain and to the dividend payment include a downturn in the U.S. economy, and large catastrophic and weather events around the globe.


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Chart: finviz.com

Schweitzer-Mauduit International Inc. (NYSE:SWM)

Schweitzer-Mauduit International, Inc. manufactures and sells paper and reconstituted tobacco products to the tobacco industry; and specialized paper products for use in various applications.


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Source: Company Overview Presentation

Schweitzer-Mauduit has a very low debt (total debt to equity is only 0.27), and it has a low trailing P/E of 14.61 and a very low forward P/E of 12.60. The PEG ratio is very low at 0.97, and the current ratio is very high at 3.70. The price to free cash flow for the trailing 12 months is very low at 14.26, and the average annual earnings growth estimates for the next five years is very high at 15%. The forward annual dividend yield is at 2.82%, and the payout ratio is only 30%. The annual rate of dividend growth over the past five years was very high at 31.71%.

Schweitzer-Mauduit has recorded strong EPS and dividend growth and mild revenue growth during, the last three years and the last five years, as shown in the table below.

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Most of Schweitzer-Mauduit's margins, return on capital and financial strength parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.


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On November 06, Schweitzer-Mauduit reported its third-quarter financial results, which missed EPS expectations by $0.01 and missed on revenues.

Third quarter / Year-To-Date Financial Highlights:

  • Third quarter net sales of $185.3 million decreased 5% versus the prior-year quarter; year-to-date net sales were $576.3 million
  • Third quarter operating profit of $41.8 million decreased from $49.4 million in the prior-year quarter; $125.6 million year-to-date
  • Third quarter Adjusted Operating Profit from Continuing Operations (see non-GAAP reconciliations) of $42.4 million decreased from $47.4 million in the prior-year quarter; $128.5 million year-to-date
  • Net income of $29.1 million in the third quarter, an increase of $1.4 million from the prior-year quarter; year-to-date net income of $85.8 million
  • Third quarter Adjusted Diluted Earnings Per Share from Continuing Operations (see non-GAAP reconciliations) was $0.95, and $2.91 year-to-date

Worldwide cigarette consumption is shifting from west to east; China alone is responsible to 39% of world production, as shown in the table below.


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Source: Company Overview Presentation

Schweitzer-Mauduit has recorded good revenue, EPS and dividend growth, and it has compelling valuation metrics and strong earnings growth prospects. Although the company's last report disappointed investors and the SWM stock fell 15% the day after, in my opinion, the reaction was exaggerated, and SWM stock can move higher. Furthermore, the rich dividend represents a nice income.

Since the company is rich in cash ($7.16 a share) and has a low debt and its payout ratio is very low, there is hardly a risk that the company will reduce its dividend payment.

Risks to the expected capital gain and to the dividend payment include decline in the worldwide cigarette consumption due to new anti-smoking regulation.


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Chart: finviz.com

Corning Inc. (NYSE:GLW)

Corning Incorporated produces and sells specialty glasses, ceramics, and related materials worldwide.

Corning has a very low debt (total debt to equity is only 0.13), and it has a low trailing P/E of 14.30 and a very low forward P/E of 12.07. The PEG ratio is very low at 0.81, and the average annual earnings growth estimates for the next five years is high at 17.60%. The price to cash ratio is low at 4.73, and the price to book value is also low at 1.19. The forward annual dividend yield is at 2.26%, and the payout ratio is only 30.6%. The annual rate of dividend growth over the past three years was very high at 23.80% and over the past five years was at 13.69%.

The GLW stock price is 3.54% above its 20-day simple moving average, 5.92% above its 50-day simple moving average and 18.78% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Corning has recorded revenue and dividend growth and negative EPS growth, during the last year, the last three years and the last five years, as shown in the table below.

Most of Corning's margins, return on capital and stock valuation parameters have been much better than that of the industry median, the sector median and the S&P 500 median, as shown in the tables below.


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On October 30, Corning reported its third-quarter results, which beat EPS expectations by $0.01.

Third-quarter performance highlights

  • Core sales were $2.1 billion, an increase of 10% over the comparable period last year. Net sales (GAAP) were $2.1 billion.
  • Core earnings per share were $0.33, demonstrating the fourth consecutive quarter of year-over-year core earnings-per-share growth, and an increase of 18% over a year ago. GAAP earnings per share were $0.28.
  • In the Display Technologies segment, LCD glass sequential price declines continue to be moderate, as expected. Combined sequential LCD glass volume was up slightly.
  • In the Telecommunications segment, sales increased 24% and core net income increased 86%* on a year-over-year basis. GAAP earnings increased 77% for the same period.
  • Core gross margin was 44%, up nearly two percentage points year over year and up slightly sequentially.

Corning has innovating products and it has compelling valuation metrics and strong earnings growth prospects, In my opinion, GLW stock still has room to go up. Furthermore, the rich growing dividend represents a nice income.

Since the company is rich in cash ($3.75 a share) and has very low debt and its payout ratio is very low, there is hardly a risk that the company will reduce its dividend payment.

Risks to the expected capital gain and to the dividend payment include; a downturn in the U.S. economy and a significant decline in LCD glass price.


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Chart: finviz.com

Chevron Corporation (NYSE:CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide.


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Source: Latest Chevron Investor Presentation

Chevron has a very low debt (total debt to equity is only 0.13), and it has a very low trailing P/E of 10.21 and a very low forward P/E of 10.51. The PEG ratio is at 1.49, and the average annual earnings growth estimates for the next five years is at 6.87%. The forward annual dividend yield is quite high at 3.20%, and the payout ratio is only 30.8%. The annual rate of dividend growth over the past three years was quite high at 10.73% and over the past five years was also high at 9.09%.

The CVX stock price is 2.28% above its 20-day simple moving average, 3.44% above its 50-day simple moving average and 4.20% above its 200-day simple moving average. That indicates a short-term, a mid-term and a long-term uptrend.

Chevron has recorded revenue, EPS and dividend growth, during the last year, the last three years and the last five years, as shown in the table below.

Most of Chevron's stock valuation, return on capital and financial strength parameters have been better than its industry median, sector median and the S&P 500 median, as shown in the tables below.


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Chevron returns value to its shareholders by stock buyback and by increasing dividend payments, as shown in the chart below.


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Source: Latest Chevron Investor Presentation

On November 01, Chevron reported its third-quarter financial results. The company reported earnings of $5.0 billion ($2.57 per share - diluted) for the third quarter 2013, compared with $5.3 billion ($2.69 per share - diluted) in the 2012 third quarter. Sales and other operating revenues in the third quarter 2013 were $57 billion, compared to $56 billion in the year-ago period.

In the report, Chairman and CEO John Watson said:

Our third quarter earnings were down from a year ago, primarily reflecting lower margins for refined products in the current period. We continue to make good progress on our major capital projects. Construction continues, and important milestones are being reached, on our Gorgon and Wheatstone LNG projects in Australia. Important interim construction goals have been recently reached for our Jack/St. Malo and Big Foot deepwater projects in the Gulf of Mexico, in preparation for their project start-ups scheduled for late 2014. We are also moving forward on the development of our liquids-rich unconventional properties in the United States.

Chevron has recorded revenue, EPS and dividend growth, and considering its cheap valuation metrics, its good earnings growth prospects, and the fact that the stock is in an uptrend, CVX stock can move higher. Furthermore, the rich growing dividend represents a nice income.


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Chart: finviz.com

Back-testing

In order to find out how such a screening formula would have performed during the last year, last 5 years and last 15 years, I ran the back-tests, which are available by the Portfolio123's screener.

The back-test takes into account running the screen every four weeks and replacing the stocks that no longer comply with the screening requirement with other stocks that comply with the requirement. The theoretical return is calculated in comparison to the benchmark (S&P 500), considering 0.25% slippage for each trade and 1.5% annual carry cost (broker cost). The back-tests results are shown in the charts and the tables below.

Since some readers could not get the same results that I got in some of my previous posts, I am giving, in the charts below, the Portfolio123 exact codes which I used for building this screen and the back-tests. The number of stocks left after each demand can also be seen in the chart. I am also giving a table which readers can use to copy and paste codes directly into the Portfolio123's screener.


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Universe(NOOTC)=TRUE

Yield > 2

Div5YCGr% > 5

Between(PayRatioTTM,1,75)

ProjPENextFY < 15

DbtTot2EqQ < 0.4

One year back-test


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Five years back-test


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Fifteen years back-test


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Summary

The dividend growth screen has given much better returns during the last year, the last five years and the last fifteen years than the S&P 500 benchmark. The Sharpe ratio, which measures the ratio of reward to risk, was also much better in all the three tests. Furthermore, the maximum drawdown, which normally is much bigger in a small portfolio than in the benchmarks, was much smaller in the one year and the fifteen year tests.

One-year return of the screen was high at 36.34%, while the return of the S&P 500 index during the same period was at 29.76%.

The difference between the dividend growth screen to the benchmark was even more noticeable in the 15 years back-test. The 15-year average annual return of the screen was at 19.18%, while the average annual return of the S&P 500 index during the same period was only 2.74%. The maximum drawdown of the screen was at 43.31%, while that of the S&P 500 was at 57%.

Although this screening system has given superior results, I recommend readers use this list of stocks as a basis for further research.

Source: Creating A Winning Dividend Growth Portfolio