High Dividend Payers with Improving Fundamentals

Harry Domash  |

Around 15 years ago, Joseph Piotroski, an accounting professor at University of Chicago, formulated a strategy for pinpointing value-priced stocks likely to outperform the overall market.
 

In a nutshell, Piotroski’s strategy involved defining a universe of cheap stocks, based on price to book ratios. From that universe, he pinpointed those with the best track records of improving fundamentals, which he defined as increasing profitability while at the same time cutting debt. Over the years, stocks meeting Piotroski’s requirements have been shown to outperform other value-based strategies, as well as the overall market.

I’ve been experimenting with adapting Piotroski’s principals to high-dividend payers, but not necessarily value-priced stocks. I’ve maintained Piotroski’s basic strategy, but tinkered with the details, particularly, putting more emphasis on cash flow growth.

My version, which I creatively dubbed, High-Dividend Payers with Improving Fundamentals,” has produced promising results over a variety of time periods. However, as you’ve heard; historical results don’t necessarily predict the future. So, with that caveat, here’s my current list. 

  Ticker

              Name

Recent Price

  Dividend Yield

 $GAS

    AGL Resources

     50.07

        4.1%

 $CMTL

           Comtech        Telecommunications

     35.25

        3.4%

 $CMRE

          Costamare

     19.60

        5.7%

  $DIN

           DineEquity

    104.49

        3.4%

 $PLOW

      Douglas Dynamics

     21.90

        4.0%

  $DUK

          Duke Energy

     79.84

        4.0%

  $ETR

             Entergy

     79.12

        4.2%

 $SCHN

 Schnitzer Steel Industries

     17.19

        4.4%

 $TRGP

     Targa Resources

     93.93

       3.3%

 $WDR

 Waddell & Reed Financial

     49.94

       3.4%

 $WILN

              Wi-LAN

      2.71

       6.1%

 

As is the case with the results produced by any screen, consider these stocks to be research candidates, not a buy list. My testing has found good results for holding periods as short as four weeks. So, I’ll revisit the list in a month and report on the results.

 

For tips and information on the best utilities and dividend stocks from Harry Domash, please check out Dividend Detective


 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

Companies

Symbol Name Price Change % Volume
WDR Waddell & Reed Financial Inc. 16.45 -0.27 -1.61 529,593 Trade
CMRE Costamare Inc. $0.0001 par value 7.84 -0.08 -1.01 967,335 Trade
TRGP Targa Resources Inc. 38.68 -0.69 -1.75 1,356,530 Trade
WILN QTRH:CA Quarterhill Inc. n/a n/a n/a 0 Trade
CMTL Comtech Telecommunications Corp. 37.05 0.62 1.69 111,717 Trade
GAS AGL Resources Inc. n/a n/a n/a 0 Trade
DIN Dine Brands Global Inc. 86.16 -0.29 -0.34 141,479 Trade
PLOW Douglas Dynamics Inc. 54.42 -0.50 -0.91 51,892 Trade
ETR Entergy Corporation 130.73 0.78 0.60 874,994 Trade
SCHN Schnitzer Steel Industries Inc. 18.79 -0.76 -3.89 330,433 Trade
DUK Duke Energy Corporation (Holding Company) 96.28 0.20 0.21 2,218,964 Trade

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