Approximately once per month I run a high-yield momentum screen using the free service on Finviz and post the results. Last month's list is here and the strategy returned 1.64% for the month, including dividends. SPY returned .28% and SDY, the S&P Dividend ETF returned 1.84%. Before I get the usual hate mail from income investors, to reiterate, the screen is more of a trading strategy and less of an income strategy (unlike some of my dividend aristocrat screens), 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 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 61 results (versus 60 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, or 12 stocks. I listed the payout ratios for informational purposes, but I would always recommend researching payout ratios in-depth since one year of poor earnings (and vice versa) can skew the ratio significantly.
This strategy is one of several I track for free on the right hand column of my site:
|Ticker||Company||Free Trend Analysis||Dividend Yield||Payout Ratio||Performance (Half Year)||Price|
|Q||Qwest Communications International Inc.||Here||5.89%||111.94%||19.87%||5.43|
|TEG||Integrys Energy Group, Inc.||Here||5.86%||133.13%||16.17%||46.41|
|DTE||DTE Energy Co.||Here||4.44%||60.03%||14.00%||47.73|
|NYX||NYSE Euronext, Inc.||Here||4.25%||127.47%||10.40%||28.24|
|MO||Altria Group Inc.||Here||6.57%||82.07%||9.91%||21.3|
|DD||EI DuPont de Nemours &Co.||Here||4.44%||62.53%||9.82%||36.9|
|RAI||Reynolds American Inc.||Here||6.49%||81.46%||7.50%||55.46|
|HNZ||HJ Heinz Co.||Here||4.01%||58.22%||7.49%||44.91|
Source: A 12 Stock High Yield Portfolio