New Dividend Screen

I recently completed a new stock screen to identify some potential dividend stocks to add to my portfolio in the coming months.  You can find my last post on the topic here.  The new screen filtered for large cap ($10B-$200B market cap) stocks with a consensus "buy" rating, yielding 2% or more and with a 25+ year track record of dividend growth.  Many of the usual suspects continue to show up, consistent with past screens I have done, including my perennial favorite AbbVie (ABBV) with a 4.91% yield and great future dividend raise prospects, having recently acquired Allergan and further expanding the product pipeline.  

Other great companies show up on this screen, including Chevron, Coca-Cola, McDonald's and Target.  I also included a percentage calculation of upside from previous close to the analysts' consensus price target in the table.  Some notable companies with a high degree of potential stock price upside include Sysco (SYY - 34%), Chevron (CVX - 31%), Medtronic (MDT - 29%) and Coca Cola (27%).  All of these stocks will depend upon the continued reopening of the US economy in order to achieve these upside targets and they may continue get buffeted around with the volatility and daily COVID-19 news in the meantime.  In the long run, however, these stocks should do fine and the analysts would seem to agree.  Stanley Black and Decker (SWK) stands to gain from an uptick in home improvement due to people staying at home and also increasing demand for new and existing homes due to very low interest rates.   

I also ran the same screen for mega cap stocks (over $200B market cap) and it only returned two companies which should be familiar:  Proctor and Gamble - 2.93% yield (PG) and Johnson and  Johnson - 2.74% yield (JNJ).  Both companies have been resilient during the current difficult economic times, with PG stock price up 5% over the past year and JNJ down 1% over the past year.

I continue to favor a conservative stock investing strategy heavily focused on strong, stable dividend yield for cash flow.  I also like to sell call options for additional yield, with a bias toward large heavily-traded index funds like SPY and QQQ, but I will also look at solid individual stocks, where the call premiums are good and I don't mind holding for some time.  Some recently acquired stocks include Lululemon (LULU) and Lennar (LEN), both leaders in their respective industries and poised to do well as the economy recovers.  AbbVie has also been a profitable stock for selling calls, with high premiums and pretty consistent upward movement in the stock, although it often moves into the money, resulting in an exercise of the underlying option and having to repurchase shares.  As long as your call strike price is above your cost basis, however, you will not lose money, which is one of the things I find most attractive about selling call options.  I outline the strategy in more detail in my previous post here.


Stay safe, healthy and positive.
I hope you find this post useful as you chart your personal financial course and Build a Financial Fortress in 2020.
To see all my books on investing and leadership, click here.
Disclaimer:  I use affiliate links where I get paid a small amount if you buy the service or product. This helps support my blog.