The current market looks risky, so keeping a portfolio of stocks that pay high dividends but are relatively low risk may be a good way to wait for better times.
With that in mind, here are my ideas for finding such stocks using the free and user-friendly Finviz stock screener.
First, go to Finviz (www.finviz.com) and[スクリーナー]Choose. Finviz calls its selection criteria “filters”.in the filter bar[すべて]Select to view the available filters. Then select a filter value using the drop-down menu associated with each filter you want to use.
First, use the “Dividend” filter and select “3% or higher” to limit the list to relatively high-dividend paid stocks.
Minimize overall risk
The US economy is currently the strongest in the world, so use the “Country” filter and select “United States” to limit the list to US-based stocks.
Then use the Market Cap filter to specify a minimum of $300 million in Market Cap (value of all outstanding shares) and exclude very small stocks that typically have above average risk.
Holding stocks that cut dividends can hurt you in two ways. First, dividend income declines, and second, news of dividend cuts usually causes stock prices to fall.
However, you can minimize your chances of holding a dividend cutter by avoiding stocks that carry a lot of debt. why?
Companies that cut dividends are typically debt-laden companies that lack the cash needed to both service their debt and maintain their dividends after suffering a business slowdown.
Avoid high debt stocks with the Debt-to-Equity Ratio. Compare total debt with shareholders’ equity (book value). The more debt, the higher the D/E ratio. Use the Debt to Equity filter and specify the minimum available value of “Less than 0.1”.
profitable stocks only
Limiting your portfolio to profitable stocks also reduces the risk of dividend cuts. You can do that using the Profitability Gauge “Return on Equity”. You can avoid underperforming stocks by simply specifying “Return on Equity” as “Positive”.
Similarly, use the “Payout Percentage” filter. This compares dividend payouts to total earnings to further minimize the risk of dividend cuts. Specify “Less than 40%” to filter out stocks that are likely to cut dividends when gross profit hits.
Analyst predicts the future
So far, our anti-dividend policy is based on past performance. But what if things change? Equity analysts get paid heavily to predict what will happen next.
Ensure that analysts are not projecting lower earnings by specifying “positive (greater than 0%)” earnings for both “This Year’s EPS Growth” and “Next Year’s EPS Growth” .
Also, use the Analyst Recommendation filter to select “Buy or Better” to ensure analysts aren’t seeing bad news in the future. Finally, we make sure that “smart money” players like our picks.
check smart money
The Institutional Owned filter measures the percentage of outstanding shares held by large investors such as mutual funds and pension plans. Limit the list to stocks that favor these wired players by specifying a minimum of 50% institutional ownership.
My screen showed 4 high payout candidates.
Cambridge Bancorp (NYSE:CATC) yields 3.3%, First Merchants (FRME) 3.2%, Northern Oil & Gas (NOG) 3.2% and Riley Exploration (REPX) 3.8%.
As always, consider the stocks listed on the screen to be research candidates, not purchase lists. The more you know about your stock, the better your results.
Harry Domash of Aptos publishes the Winning Investing and Dividend Detective websites. To contact him, visit www.wininginvesting.com or Santa Cruz Sentinel, 324 Encinal St., Santa Cruz, CA 95060.