12 Rallying Dividend Stocks With Strong Corporate Governance

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 |  Includes: CEG, CSCO, ETR, GWW, HD, IBM, MGRC, NNI, RVR, SHW, SMP, WTS
by: Kapitall

How well a company is run has big implications to its profitability, stock performance and its ability to continue paying a dividend yield. One way to gauge management is by looking at a company’s corporate governance policies.

Institutional Shareholder Services (ISS) gives ratings for four areas of corporate governance on risks related to: the board, the audit committee, the compensation committee and shareholder rights.

We ran a screen on dividend stocks rallying above their 20-day, 50-day, and 200-day moving averages. We screened these stocks for those with "low concern" ratings in all four corporate governance categories from ISS.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬


We also created a price-weighted index of the stocks mentioned below and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Click to enlarge

Do you think these companies are being run well? Use this list as a starting point for your own analysis.

List sorted by dividend yield.

1. Entergy Corporation (NYSE:ETR): Operates as an integrated energy company in the United States. Market cap of $12.11B. Dividend yield at 4.83%, payout ratio at 41.72%. The stock is currently trading at 0.38% above its 20-Day SMA, 3.87% above its 50-Day SMA, and 4.44% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 2.01% over the last year.

2. White River Capital Inc (NYSEMKT:RVR): Engages in the specialized indirect auto finance business. Market cap of $77.13M. Dividend yield at 4.58%, payout ratio at 38.28%. The stock is currently trading at 6.50% above its 20-Day SMA, 10.95% above its 50-Day SMA, and 19.08% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a good month, gaining 12.8%.

3. McGrath Rentcorp (NASDAQ:MGRC): Operates as a business-to-business rental company in the United States. Market cap of $659.45M. Dividend yield at 3.40%, payout ratio at 45.30%. The stock is currently trading at 0.92% above its 20-Day SMA, 7.81% above its 50-Day SMA, and 4.81% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 2.7% over the last year.

4. The Home Depot, Inc. (NYSE:HD): Operates as a home improvement retailer. Market cap of $59.26B. Dividend yield at 3.06%, payout ratio at 42.38%. The stock is currently trading at 2.50% above its 20-Day SMA, 7.87% above its 50-Day SMA, and 7.34% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 24.93% over the last year.

5. Constellation Energy Group, Inc. (NYSE:CEG): Operates as an energy company in the United States and Canada. Market cap of $7.99B. Dividend yield at 2.42%, payout ratio at 47.78%. The stock is currently trading at 0.24% above its 20-Day SMA, 2.64% above its 50-Day SMA, and 10.83% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 39.96% over the last year.

6. Nelnet Inc. (NYSE:NNI): Focuses on providing fee-based processing services and education-related products and services in the areas of loan financing, loan servicing, payment processing and enrollment services. Market cap of $1.02B. Dividend yield at 1.84%, payout ratio at 16.47%. The stock is currently trading at 1.81% above its 20-Day SMA, 8.31% above its 50-Day SMA, and 4.35% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 2.02% over the last year.

7. The Sherwin-Williams Company (NYSE:SHW): Engages in the development, manufacture, distribution and sale of paints, coatings and related products primarily in North and South America, the Caribbean region, Europe and Asia. Market cap of $8.73B. Dividend yield at 1.74%, payout ratio at 31.14%. The stock is currently trading at 0.10% above its 20-Day SMA, 6.18% above its 50-Day SMA, and 4.71% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 16.69% over the last year.

8. IBM (NYSE:IBM): Provides information technology (IT) products and services worldwide. Market cap of $218.33B. Dividend yield at 1.62%, payout ratio at 21.54%. The stock is currently trading at 0.39% above its 20-Day SMA, 3.45% above its 50-Day SMA, and 9.44% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 29.87% over the last year.

9. Standard Motor Products Inc. (NYSE:SMP): Distributes replacement parts for motor vehicles in the automotive aftermarket industry primarily in the United States, Canada and Latin America. Market cap of $417.98M. Dividend yield at 1.52%, payout ratio at 15.80%. The stock is currently trading at 6.37% above its 20-Day SMA, 20.93% above its 50-Day SMA and 34.09% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a good month, gaining 23.13%.

10. W.W. Grainger, Inc. (NYSE:GWW): Distributes facilities maintenance and other related products and services in the United States, Canada, Japan, Mexico, India, Puerto Rico, China, Colombia and Panama. Market cap of $12.30B. Dividend yield at 1.50%, payout ratio at 26.55%. The stock is currently trading at 1.15% above its 20-Day SMA, 8.18% above its 50-Day SMA, and 19.42% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 42.57% over the last year.

11. Cisco Systems, Inc. (NASDAQ:CSCO): Designs, manufactures and sells Internet protocol (IP)-based networking and other products related to the communications and information technology industry worldwide. Market cap of $98.82B. Dividend yield at 1.30%, payout ratio at 15.43%. The stock is currently trading at 1.14% above its 20-Day SMA, 7.62% above its 50-Day SMA, and 10.24% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 5% over the last year.

12. Watts Water Technologies, Inc. (NYSE:WTS): Designs, manufactures and sells water safety and flow control products for the water quality, water conservation, water safety and water flow control markets in North America, Europe and China. Market cap of $1.30B. Dividend yield at 1.24%, payout ratio at 23.22%. The stock is currently trading at 4.90% above its 20-Day SMA, 17.79% above its 50-Day SMA, and 5.75% above its 200-Day SMA. According to ISS, the company has "low concern" in all corporate governance categories. The stock is a short squeeze candidate, with a short float at 6.95% (equivalent to 7.75 days of average volume). The stock has had a good month, gaining 21.14%.

*ISS ratings sourced from Yahoo! Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.