Deep Dive: 22 dividend stocks screened for quality and safety

deep-dive:-22-dividend-stocks-screened-for-quality-and-safety

Now that the S&P 500 has hit a new closing low for 2022, it is a good time to rerun a screen of low-volatility dividend stocks that may perform relatively better.

An initial screen of the S&P 500 SPX, from June 29, resulted in a list of 19 stocks that met quality criteria set by Lewis Altfest, CEO of Altfest Personal Wealth Management, which is based in New York and manages about $1.5 billion for private clients.

Altfest’s screen was designed to help investors identify potential stocks for long-term investments — that is, for commitments of several years, at least — with some implied downside protection. Any stock screen is only a first step for your own consideration of companies’ less tangible quality factors.

Here’s a year-to-date price chart to illustrate the broad market’s action before and after we did the first screen:

FactSet

From the previous closing low on June 16, the S&P 500 rose 17% through Aug. 16. Then it took a 15% flop through Sept. 26, hitting its lowest closing level since Dec. 14, 2020, according to Dow Jones Market Data.

Read: The Dow just joined the S&P 500 in a bear market: What investors need to know

First, we’ll lay out the criteria, with results from a new screen as of the close on Sept. 26. Then we’ll summarize changes to the list and show how the June 29 list has performed, even though the intention of the first screen wasn’t to “pick winners” for a period of less than three months.

New dividend-stock screen

Here are the screening criteria, with the number of companies meeting each among the S&P 500:

  • Beta for the past 12 months of 1.00 or less, when compared with the price movement of the entire index: 298 companies. For this screen, a beta of less than 1 indicates a stock’s price has been less volatile than the S&P 500 over the past year.
  • Dividend yield of at least 3.50%: 78 companies.
  • Expected earnings per share for 2024 increasing at least 4% from 2023, based on estimates among analysts polled by FactSet: 50 companies.
  • Expected sales for 2024 increasing at least 4% from 2023: 22 companies. We are using calendar-year estimates for earnings and sales; many companies have fiscal years that don’t match the calendar.

Here are the 22 companies identified by the new screen, sorted by dividend yield:

Company Ticker Dividend yield Expected increase in EPS – 2024 Expected increase in sales – 2024 12-month beta On June 29 list?
V.F. Corp. VFC 5.71% 9% 6% 0.98 Yes
Philip Morris International Inc. PM 5.63% 9% 9% 0.54 Yes
Intel Corp. INTC 5.41% 8% 5% 0.86 No
International Business Machines Corp. IBM 5.41% 5% 4% 0.51 Yes
Boston Properties Inc. BXP 5.26% 9% 6% 0.87 No
Healthpeak Properties Inc. PEAK 5.12% 16% 8% 0.78 No
Realty Inc.ome Corp. O 4.89% 4% 9% 0.54 Yes
Pinnacle West Capital Corp. PNW 4.88% 7% 4% 0.62 Yes
Digital Realty Trust Inc. DLR 4.79% 22% 7% 0.90 Yes
Omnicom Group Inc. OMC 4.52% 8% 4% 0.73 No
Edison International EIX 4.43% 7% 4% 0.82 No
Ventas Inc. VTR 4.34% 31% 7% 0.57 Yes
Stanley Black & Decker Inc. SWK 4.06% 27% 5% 0.92 No
Hasbro Inc. HAS 3.94% 17% 7% 0.73 No
Morgan Stanley MS 3.89% 13% 4% 0.94 Yes
Darden Restaurants Inc. DRI 3.81% 13% 6% 0.91 Yes
Cisco Systems Inc. CSCO 3.75% 6% 4% 0.77 No
Southern Co. SO 3.72% 9% 4% 0.55 Yes
UDR Inc. UDR 3.72% 28% 7% 0.85 No
Welltower Inc. WELL 3.71% 39% 12% 0.60 No
Essex Property Trust Inc. ESS 3.65% 12% 4% 0.74 No
Corning Inc. GLW 3.61% 10% 6% 0.93 No
Source: FactSet

Click on the tickers to begin your own research about any of the companies.

Click here for Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.

Checking in with the June 29 group

Among the 22 companies that passed the new screen, 10 had passed the June 29 screen. So here’s a new screen for the entire June 29 group, in its original order, with companies that no longer pass in bolded typeface. Screen elements that no longer pass are bolded:

Company Ticker Dividend yield Expected increase in EPS – 2024 Expected increase in sales – 2024 Beta Price change since June 28 2022 Price change 
Vornado Realty Trust VNO 9.09% -44% 5% 0.93 -21% -44%
Oneok Inc. OKE 7.39% 5% 6% 1.03 -11% -14%
Philip Morris International Inc. PM 5.63% 9% 9% 0.54 -12% -5%
Walgreens Boots Alliance Inc. WBA 5.87% 8% 3% 0.78 -20% -37%
International Business Machines Corp. IBM 5.41% 5% 4% 0.51 -14% -9%
Pinnacle West Capital Corp. PNW 4.88% 7% 4% 0.62 -5% -1%
Federal Realty Investment Trust FRT 4.91% 2% 4% 0.95 -10% -35%
V.F. Corp. VFC 5.71% 9% 6% 0.98 -24% -52%
Realty Income Corp. O 4.89% 4% 9% 0.54 -12% -15%
Truist Financial Corp. TFC 4.79% 2% 2% 0.86 -10% -26%
Kimco Realty Corp. KIM 4.88% 13% 4% 1.02 -11% -27%
U.S. Bancorp USB 4.68% 10% 2% 0.95 -12% -27%
Darden Restaurants Inc. DRI 3.81% 13% 6% 0.91 5% -20%
Southern Co. SO 3.72% 9% 4% 0.55 4% 7%
Principal Financial Group Inc. PFG 3.59% 9% 6% 1.01 5% -1%
Cardinal Health Inc. CAH 3.01% 17% 5% 0.71 22% 28%
Digital Realty Trust Inc. DLR 4.79% 22% 7% 0.90 -24% -42%
Morgan Stanley MS 3.89% 13% 4% 0.94 2% -19%
Ventas Inc. VTR 4.34% 31% 7% 0.57 -19% -19%
Source: FactSet

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