Thursday, May 11, 2017

10 Dividend Growth Stocks For May 2017

David Fish maintains a list of stocks with at least five consecutive years of paying higher dividends. Colloquially called the CCC list, it contains more than 800 dividend growth stocks trading on U.S. exchanges. The CCC list and the accompanying spreadsheet is a wonderful source for dividend growth investors and I've been using it for years.

In my monthly 10 Dividend Growth Stock series, I identify 10 CCC stocks worthy of further research. To create the list, I trim the CCC list using various screens. I rank the trimmed list and assign a 7-star rating to each stock. Stocks rated 5 stars or better are worthy of further analysis.

The latest CCC list (dated 4/28/17) contains 819 stocks. This month, I applied the following screens to trim the CCC list to a smaller number of candidates:
  1. Trailing 12-month Price/Sales ≤ 4 (removes 282 stocks)
  2. Debt to Equity Ratio ≤ 1.5 (removes 136 stocks)
  3. (2 × Dividend Yield) + (3-year Dividend Growth Rate ÷ 2) ≥ 8 (removes 102 stocks)
  4. Earnings per Share Payout < 80% (removes 51 stocks)
  5. Market Capitalization ≥ $500 Million (removes 23 stocks)
  6. 1 ≤ Dividend Yield ≤ 7 (removes 16 stocks)
These screens trim the CCC list from 819 to 209 stocks. I did a quick preliminary ranking using data in the CCC spreadsheet and selected the top 50 stocks for the more comprehensive ranking where I use additional sources like MorningstarS&P Capital IQ, and F.A.S.T. Graphs.

To see the top 10 ranked stocks for April, please read this article at Seeking Alpha.

Includes: ADMBENCAHCVSGDHRLMGAMMMNKEQCOMVFC

Please feel free to leave comments on this article either at Seeking Alpha or here, on my blog. I'll do my best to respond to each comment as quickly as possible.

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