I ran a screener for fun on my Dividends 500 portfolio, trying to find "undeniable" types of stocks for fighting the market's weirdness right now.
A stock needs to have three things to make it into Dividends 500:
- be an S&P 500 member (mainly to keep the size of the portfolio under control for me)
- an increasing dividend YoY
- a payout ratio below 50%
Using this group of roughly 200 stocks, I added another filter for the following:
- 10%+ revenue growth YoY -- both forward and trailing
- 10%+ net income and free cash flow (FCF) margin
- 10%+ return on equity (ROE) and return on invested capital (ROIC)
I chose to use net income margin and FCF margin to avoid getting pencil whipped by stocks boosting FCF through stock-based compensation. If a company's ROE was negative from share buybacks, I looked to ROIC to see if they qualified.
Here is the list of what remained:
$AAPL $MA $QCOM $KLAC $ODFL $AMAT $ACN $MSFT $V $MPWR $MSCI $JKHY $WST $HSY $FCX $CTAS $ZTS $CTSH $UNP $APH $SWKS $MMC $AVGO $FDS $CSX $NXPI $IEX $WRB $NSC $MCHP $TMO $WM
It increased my interest in Hershey and Waste Management as steady-Eddie picks as they might be the safest on this list. I also lined up KLAC, ACN, MPWR, MSCI, and FDS for more research, as it feels like I keep seeing their names everywhere.
Did any of these stocks surprise you or stand out in any way?
Would a basket of these 10/10/10 stocks beat the S&P 500 over the next decade?
13 VotesPoll ends on: 09/27/22