Best Dividend Stocks For Growth, Value, And Safety
Seeking Alpha Analyst Since 2010
Dividend Growth Enthusiast. Investor since age 12. Blogger since age 57.
Managing editor of the dividend and financial literacy website DividendSystem.com which offers free dividend stock selections and education on investing.
To find today's best dividend stocks, I searched for stocks with 10 years or more of dividend increases, PE less than 25, payout ratio less than 70%, ROE greater than 10%, and Debt/Equity ratio of less than 2.
To determine which candidates were adept at growth (as indicated by past performance), I ranked each stock in terms of the dividend yield, 5-year dividend growth rate, and their EPS 5 year growth rate. Dividend yield was triple weighted, other factors weighted equally. The top five growth candidates in descending order are MCD, INTC, SXL, AZN, and HCP.
Similarly, to determine which candidates were a better value, I ranked them according to their PE ratio, PS ratio, and PB ratio, all with equal weightings. The top five value candidates (also in descending order) are SXL, CVX, XOM, CSL, and INTC.
To determine the safety of the stocks found in my screen, I ranked the candidates by their Debt/Equity ratio and years of increasing dividends. The top five "safe" candidates are HRL, GPC, GWW, XOM, and NVO.
Applying equal weighting to each of the categories above, I totaled the scores to find the five best overall candidates. They are INTC, CVX, XOM, SXL, and AZN.
I will use these results to further investigate the stocks to determine if an investment is prudent at this time. Would love to hear comments from other dividend investors on the effectiveness of this process.
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