Archive for December, 2019

8 Dividend Stocks Passing Vigorous Fundamental, Yield and ESG Criteria

Wednesday, December 25th, 2019

We relied upon the extensive research of institutional ETF sponsors and the rules-based strategies they follow to identify individual stocks demonstrating multi-dimensional strength. 

Eight stocks pass these filter criteria:

  • Held by Vanguard multi-factor fund (VFMF) which selects stocks for value, quality and momentum within the Russell 3000
  • Held by Vanguard value factor fund (VFVA) which selects stocks within Russell 3000 for value — giving the filter an value bias
  • Held by Vanguard high dividend yield fund (VYM) which tracks the FTSE High Dividend Yield Index
  • Paid and increased dividend each year for at least 5 years
  • Held by Vanguard ESG fund (ESGV) which is based on the Sustainalytics service which uses “traditional” ESG criteria 
  • Held by Goldman Sachs fund (JUST) which tracks non-traditional ESG-types of criteria based on surveys of what the general population wants to see in a business
  • Were seen technically as of 12/24/19 by as clear Buy ratings
  • Have a 12-month trailing distribution yield of at least 3% according to BarChart.

For reference, here is the 1-year performance of the ETFs we used as data sources, compared to the performance of SPY (S&P 500).

These are the 8 stocks:

  • AT&T (T) 5.22% yield
  • Verizon (VZ) 4.01% yield
  • Huntington Bancshares (HBAN) 3.97% yield
  • Keycorp (KEY) 3.65% yield
  • Regions Financial Corp (RF) 3.61% yield
  • Citizens Financial Group (CFG) 3.56% yield
  • Metlife (MET) 3.45%
  • First Horizon National Corp (FHN) 3.38% yield

All but Verizon outperformed the Vanguard Multi-Factor fund over 1 year.  First Horizon nearly matched SPY performance.  All the other stocks outperformed SPY.

Five-year monthly, dividend adjusted price charts for the 8 stocks, show the stock in black; the performance relative to the S&P 500 (SPY) in red; and the Dollar amount of dividends paid in the lower panel in green.

(click images to enlarge)

Here is how Morningstar describes them quantitatively:

Market-Cap / Yield / Growth


Forward Valuation

Valuation Multiples vs Historical Averages from AAII

Operational Data from AAII

Insider and Institutional Purchases from AAII

These are the analyst views as presented by MarketScreener:

As a yield seeking investor, with an expectation that the value factor will do OK over the long-term, I may acquire some of these stocks in small size for the tactical sleeve of my portfolio.

I principally invest in funds for diversification, but sometimes tactically invest in a limited number of individual stocks in small size.

We all need a claim on the upside, but also need a solid element of protection.  Above average yield from value stocks with a modicum of momentum may provide some of that claim and some of that protection.