Hooray For The Dividend Payers!
After years of subpar returns, the dividend-paying stocks of the S&P 500 outperformed
the non-dividend payers, 14.8% to 8.3%, for the 12 months through February 28, 2007.
If you think this outperformance will continue, focus on stocks with dividend yields over 2%, the market's historic average.
From that universe, look for companies with a return on equity of over 5% that have recently reported a positive earnings surprise. In addition, eliminate stocks that have lagged the market over the past six months.
Stocks that have passed all these screens returned 18% per year from 1990 through 2006, far above the 12% annualized gain of the S&P 500.
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the non-dividend payers, 14.8% to 8.3%, for the 12 months through February 28, 2007.
If you think this outperformance will continue, focus on stocks with dividend yields over 2%, the market's historic average.
From that universe, look for companies with a return on equity of over 5% that have recently reported a positive earnings surprise. In addition, eliminate stocks that have lagged the market over the past six months.
Stocks that have passed all these screens returned 18% per year from 1990 through 2006, far above the 12% annualized gain of the S&P 500.
* * * * *
posted by Bob Moser at
6:26 PM
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