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 3.31% including dividends (2.52% before dividends) versus 3.23% for SPY and 0.19% for SDY, the S&P Dividend ETF. Once again the top performing stock from last month's list was Qwest Communications (Q) returning 7.95% excluding its $.08 dividend while Pepco Holdings (POM) was the worst performing at -3.45% (excluding its $.27 dividend). The strategy has done well this year and is one I continue to track because of its promise. In recent months I have also done a variation of this strategy with the Dividend Champions list in which I only search stocks that have had a history of raising dividends for 25+ years.
The screen looks for high yielding high momentum stocks. I screen the S&P 500 for stocks yielding greater than 4% and then ranked them by 6 month returns. There were 54 results (versus 55 last month) and per a previous article (see below for explanation), 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.
The article in reference was a study done by Charles Schwab in which they studied the 1500 largest stocks by market capitalization from 1990-2009 and divided yielding stocks into 4 quadrants. They ranked the highest yielding stocks by 6 month price momentum, divided them into 5 segments, and found that highest yield stocks with the highest 6 month price momentum outperformed a) all other momentum segments (in other words, those high yield stocks with lower price momentum) and b) the annual return of the other yield quadrants.
|Ticker||Company||Industry||Retirement Portfolios||Dividend Yield||Performance (Half Year)||200-Day SMA||Price|
|(Q)||Qwest Communications International Inc.||Telecom Services - Domestic||Here||4.37%||43.16%||31.00%||7.33|
|(CTL)||CenturyLink, Inc.||Telecom Services - Domestic||Here||6.50%||35.20%||25.37%||44.63|
|(PM)||Philip Morris International, Inc.||Cigarettes||Here||4.34%||32.61%||14.74%||59|
|(WIN)||Windstream Corporation||Telecom Services - Domestic||Here||7.14%||30.96%||23.46%||14|
|(CMS)||CMS Energy Corp.||Diversified Utilities||Here||4.48%||28.14%||14.75%||18.76|
|(RAI)||Reynolds American Inc.||Cigarettes||Here||6.08%||27.91%||16.98%||32.22|
|(MO)||Altria Group Inc.||Cigarettes||Here||6.12%||26.98%||11.68%||24.85|
|(FTR)||Frontier Communications Corporation||Telecom Services - Domestic||Here||8.00%||23.29%||22.80%||9.37|
|(VZ)||Verizon Communications Inc.||Telecom Services - Domestic||Here||5.73%||22.84%||15.38%||34.04|
|(CNP)||CenterPoint Energy, Inc.||Diversified Utilities||Here||4.92%||21.75%||9.84%||15.84|
|(SE)||Spectra Energy Corp.||Oil & Gas Pipelines||Here||4.08%||21.26%||12.66%||24.53|
Disclosure: No positions