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11 High-Yield Stocks to Buy Now - 40455 views
About once a month, I run a high-yield momentum screen using the free service on Finviz and post the results. Returns for last month's list were 1.99% excluding dividends, compared with 3.52% for SPY (which also paid a $.602 dividend on Sept. 17) and 4.42% for SDY (which paid a $.443 dividend on Sept. 17). Including dividends, the portfolio earned 2.61% for the month.
The strategy has done well this year, despite underperforming this past month. The previous month it returned 4.75% before dividends and 5.18% when factoring in dividends.
As I have previously mentioned, the screen is more of a trading strategy and less of an income strategy (unlike some of my dividend aristocrat screens), although the dividends do play an essential component in the overall returns. Thus, turnover could be high and the strategy is not for everyone. However, early results show relatively low turnover from month to month but this could change in the future.
Second, it is a screen and not a recommended or comprehensive portfolio. In other words, there could be sector imbalances, so for investors looking to have exposure across different sectors and asset classes, this screen could potentially serve as a starting point for further research or one small piece to a much larger picture.
The screen looks for high-yielding, high-momentum stocks. I screen the S&P 500 for stocks yielding greater than 4% and then rank them by six-month returns. There were 53 results this month, compared with 57 last month and 59 the month before that.
The highest-momentum high-yield stocks have have historically been the best-performing, so I have listed the top 20% based on six-month returns, or 11 stocks.
I listed the payout ratios for informational purposes, but I would always recommend researching payout ratios in-depth since one year of poor earnings (and vice versa) can skew the ratio significantly.
This strategy is one of several I track for free on the right hand column of my Web site.