Published Fri, 29 May 2020 09:00:00 -0400 on Seeking Alpha
I rank a selection of dividend growth stocks in Dividend Radar and present the 10 top-ranked stocks for consideration.
To rank stocks, I use DVK Quality Snapshots to obtain quality scores and break ties by considering additional metrics.
This month, I'm presenting high-quality stocks with favorable Chowder numbers trading below fair value.
In my monthly series of 10 Dividend Growth Stocks, I rank a subset of Dividend Radar's list of dividend growth (DG) stocks. Dividend Radar is a weekly automatically generated spreadsheet listing stocks with dividend increase streaks of five years or more.
This month, I decided to rank high-quality DG stocks with a favorable Chowder Number (CDN) trading below fair value. I use DVK Quality Snapshots to assess the quality of DG stocks.
Screening and Ranking
The latest Dividend Radar list (dated May 22, 2020) contains 774 stocks.
I decided to screen for DG stocks with quality scores in the range 23-25 that are trading below my fair value estimates. Furthermore, I considered only stocks likely to generate annualized total returns of at least 8%, according to the Chowder Rule. These are pretty stringent screens, and only eleven DG stocks in Dividend Radar qualify.
Ranking by Quality
I use the scoring system of DVK Quality Snapshots to obtain quality scores, and consider the following factors as tie-breakers:
SSD Dividend Safety Scores S&P Credit Ratings Dividend Yield Each stock's Rank is shown in the tables that follow.
Fair Value Estimates
To estimate fair value, I reference fair value estimates and price targets from several sources, including Morningstar and Finbox.io. Additionally, I estimate fair value using the five-year average dividend yield of each stock using data from Simply Safe Dividends.
With several estimates and targets available, I ignore the outliers (the lowest and highest values) and use the average of the median and mean of the remaining values as my fair value... Read more
|Stock name||Last trade||P/E||Earnings/Share||Dividend/Share||Dividend yield|
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