What are we looking for?
Yield and income growth in the U.S. market.
With the S&P 500 yielding only 1.6 per cent, the U.S. index is disappointing for investors looking for income at the moment. On the other hand, we believe it is difficult to completely ignore the U.S. market because of its size and growth potential.
Today, we will look for stocks that are yielding at least 3.2 per cent, double the yield of the S&P 500, and that have demonstrated solid dividend growth in recent years.
We screened U.S. stocks focusing on the following criteria:
- Market capitalization higher than US$1-billion;
- Dividend yield higher than 3.2 per cent;
- Three-year dividend growth higher than 5 per cent. The threshold may seem low, but the COVID-19 pandemic forced many companies to limit their dividend hikes over the period;
- An Inovestor SP score higher than 65. The score mainly considers risk-adjusted return on capital, earnings-per-share growth and free cash flow per share. The score varies between zero and 100. A score of 65 implies a high-performing company;
- Three-month SP score increase of more than 2 per cent. To achieve 2 per cent, the company would need, for example, a current SP score of at least 51 if it was previously 50;
For informational purposes, we have also included price-earnings ratios, and one-year price return. Please note that some ratios may be shown as of end of previous quarter.
More about Inovestor
Inovestor for Advisors is a fundamental-analysis research platform specializing in the economic value-added approach. With Inovestor, advisers can quickly identify attractive investment opportunities, outsource their stock picking by using model portfolios, and easily communicate investment decisions with clients through client-friendly reports.
What we found
U.S. stocks distributing twice as much dividends as the S&P 500
|TICKER||NAME||PRICE||MKT VALUE ($ MIL.)||DIV. YLD. (%)||3Y DIV. GRTH. (%)||SP SCORE||3M SP CH. (%)||P/E||1Y PRICE RTN. (%)|
|SBR-N||SABINE ROYALTY TRUST||84.69||1235||10.2||27.1||84||3.7||11.0||74.5|
|OMF-N||ONEMAIN HOLDINGS INC||45.4||5500||8.8||56.1||69||2.0||6.4||-15.2|
|APAM-N||ARTISAN PARTNERS ASSET MANAGEMENT, INC. CLASS A||36||2264||6.9||7.7||76||2.7||10.9||-14.1|
|MDC-N||M.D.C. HOLDINGS, INC.||37.91||2752||5.3||22.4||77||20.3||4.8||-13.7|
|FIBK-Q||FIRST INTERSTATE BANCSYSTEM, INC. CLASS A||36.69||3832||5.1||11.1||66||6.5||18.7||-1.2|
|RDN-N||RADIAN GROUP INC.||21.97||3451||4.2||330.9||69||4.5||5.0||-7.2|
|STC-N||STEWART INFORMATION SERVICES CORPORATION||46.44||1260||3.9||11.2||70||2.9||7.8||-34.1|
|FITB-Q||FIFTH THIRD BANCORP||37.17||25401||3.6||10.3||67||3.1||11.0||-24.3|
|RF-N||REGIONS FINANCIAL CORPORATION||23.67||22108||3.4||7.8||66||3.1||10.3||-5.0|
Sabine Royalty Trust (SBR-N
Non-prime lender OneMain Holdings Inc.
Onemain Holdings Inc. (OMF-N
M.D.C. Holdings Inc. (MDC-N
Investors are advised to do further research before investing in any of the companies listed in the accompanying table.