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.
Returns for the last month were 1.99% excluding dividends versus 3.52% for SPY (which also paid a $.602 dividend on 9/17) and 4.42% for the SPDR Dividend ETF (NYSEARCA:SDY) (which paid a $.443 dividend on 9/17). Including dividends, the portfolio earned 2.61% for the month. The strategy has done well this year despite underperforming this month. The previous month it returned 4.75% before dividends and 5.18% when factoring in dividends.
As I have previously mentioned 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. However, early results show relatively low turnover from month to month but this could change in the future.
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 screen the S&P 500 for stocks yielding greater than 4% and then rank them by 6 month returns. There were 53 results (versus 57 last month and 59 the previous 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 11 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.
|Ticker ||Company ||Trend Analysis ||Dividend Yield ||Payout Ratio ||Performance (Half Year) |
|Q ||Qwest Communications International Inc. ||Here ||5.05% ||126.14% ||20.99% |
|MO ||Altria Group Inc. ||Here ||6.20% ||83.19% ||20.09% |
|FTR ||Frontier Communications Corporation ||Here ||8.94% ||237.46% ||19.18% |
|PGN ||Progress Energy Inc. ||Here ||5.56% ||83.31% ||17.10% |
|POM ||Pepco Holdings, Inc. ||Here ||5.65% ||88.85% ||16.10% |
|WIN ||Windstream Corporation ||Here ||8.24% ||148.07% ||15.07% |
|CTL ||CenturyLink, Inc. ||Here ||7.29% ||99.13% ||14.71% |
|SO ||Southern Company ||Here ||4.83% ||70.85% ||13.93% |
|TEG ||Integrys Energy Group, Inc. ||Here ||5.13% ||103.70% ||13.91% |
|CNP ||CenterPoint Energy, Inc. ||Here ||4.85% ||74.31% ||13.79% |
|HCP ||HCP, Inc. ||Here ||5.12% ||431.26% ||13.40% |
Disclosure: No positions